Closing Questions

How can I get Roger McGehee, Jr. PLLC to close my loan?

It's easy to select Roger McGehee, Jr. PLLC as your closing attorney!

Under the Fair Lending Act, the borrower has the right to select the closing attorney. When you are applying for your loan, simply look for the attorney preference checklist and make sure you chose Roger McGehee, Jr., PLLC to close your loan. Your mortgage broker will then get in touch with us, and we'll take it from there!

What do I need to bring to closing?

You should bring two forms of identification, including at least one valid government-issued ID such as a passport or a driver's license.

How long will the closing take?

The closing ceremony, when all of the transfer and loan documents are signed, typically lasts around half an hour to forty-five minutes. Closings rarely exceed an hour. Depending upon the number of documents that need to be signed, and the detail with which the parties wish to review them, the closing may take longer.

Occasionally there may be a problem that must be addressed at the last minute, which might further prolong closing, but this rarely happens. A good guide is to arrive for closing ten to fifteen minutes early and expect the closing to take around half an hour to forty-five minutes.

What documents will I have to sign?

Unless you are paying for the property in cash, it is usually the buyer who has to sign the great majority of the closing documents. While many are standardized, uniform, and used in every closing, the sheer number of documents to sign can sometimes be intimidating.

The settlement statement, promissory note, deed of trust, truth-in-lending statement, occupancy affidavit, and identity affidavit, along with a number of tax forms, are signed at every closing. Additionally, your lender may require a number of other documents to be signed. At closing we will happily explain each of the documents you sign and answer any question you may have.

For more information, please view these documents in the discussion below titled ‘So, what exactly are all these papers that you're signing at closing?’

You can also view a sample FHA loan package and a conventional loan package. These packages include papers both for the borrower and the closing attorney, and will be similar but not exact as each lender has slightly different forms and substance to the documents you sign at closing.

When will I know how much money to bring to closing?

A settlement statement, showing exactly how much money you will need to bring to closing, is prepared as soon as we receive closing instructions from your lender. This may be several days in advance of your closing, or it may be just before you are scheduled to close on your home; it all depends upon your lender. Unfortunately, most lenders get the closing documents to our office a short time before closing. Your lender can tell you approximately how much you need to bring. It is a good idea to get your cashier's check for more and we will issue a refund to you at closing if you have brought too much money to closing.

Rest assured we encourage lenders to get their closing instructions to us in a timely fashion and strive to provide a settlement statement to you as quickly as possible.

Should I have my own lawyer attend closing?

In Mississippi, the closing attorney usually represents the lender, not the buyer or seller. This does not mean that that the interests of lender, buyer, and seller are opposed. In fact, just the opposite is true most of the time: the seller wants to sell the property, the purchaser wants to buy the property, and the lender wants to give a loan to the buyer to pay for the property.

In other words, the closing attorney, while specifically representing the lender, works to the benefit of all the parties to the transaction. The closing attorney cannot advocate for the seller or buyer at closing or afterwards. This would be a conflict of interest. After the closing if you need legal assistance, we can work with you so long as you are not in a dispute with the other party at the closing or with the lender. Because the interests of the lender are closely aligned with those of the buyer and seller, most of the time the parties do not retain separate counsel and instead rely upon the efficiency and professionalism of the closing attorney.

If you want, you are more than welcome to have your own attorney review documents prior to closing or even attend the closing itself. We will happily work with you to ensure you are satisfied with your closing experience.

The amount needed for my closing is different than my good faith estimate. Why?

Before closing, your lender or mortgage broker should have presented you with a Good Faith Estimate of closing costs. This represents the lender's best guess as to what your costs will be when you get to closing. Unfortunately, it is at best only an estimate and should be treated as such.

Good Faith Estimates are notoriously inaccurate in a number of areas: in the proration of taxes and assessments, which change daily; in the interim interest charge, which also changes daily because when the good faith estimate is given to you, there is no way to know the exact day of the closing; the amount of initial escrow account contributions will vary; and in the inclusion or exclusion of owner's title insurance. Chances are if your good faith estimate differs from your actual costs, the discrepancy will be in one or more of these items. You will be required to place funds into escrow with your lender for the following items: 1) interest from the date of closing until the first day of the following month (your first payment will usually be the first of the following month, e.g., an example is, if you close on June 15, your prepaid interest will be for the number of days until July 1. Your first payment to the lender will then be due on August 1. 2) Property taxes are escrowed with your lender so that when the taxes are due on January 1st of the following year so that there will be enough funds available to pay the tax collector; the closer to the end of the calendar year that you close, the amount that you prepay into escrow will be higher; You receive credit pro-rated for the time that the seller has owned the home prior to the closing date. This will be shown on page 1 of the settlement statement; 3) Homeowner's insurance (fire, windstorm, extended coverage, etc.) is usually 2 months of the annual premium. You are required to pay the first year of your homeowner's insurance at the closing or bring a paid receipt from your insurance carrier to closing. The homeowner's insurance that you escrow each month will be used to pay the premium 12 months later for the following year; 4) Mortgage insurance premium: If your loan is for more than 80% of the value of your home, you will be required to pay a lump sum MIP payment at closing plus pay into escrow usually 2 months premium then an amount determined by your lender in your monthly payment.

Your monthly payment to your lender will consist of principal and interest on your loan; escrow for taxes, homeowner's insurance and mortgage insurance premium. Chances are excellent that your lender will sell your loan to another bank, so don't be surprised if you get a letter in a few months from your lender that future payments should be sent to another company. This is absolutely normal. If you have a question when you receive this letter, you should call your loan originator.

Some home purchasers qualify for a Mississippi Home Corporation loan or grant to pay up to 3% of the 3.5% down payment that is required on a FHA loan. If this money is a loan, you will be required to repay with interest over a pre-arranged number of months. MHC requires that this monthly payment be drafted from your bank account. If your loan includes a loan from MHC, be sure to bring a personal check to closing that can be marked 'void' and given to MHC along with an authorization form so that they can draft your account each month. This is the only way that MHC will make the down payment loan to a borrower. If the MHC money is a 'grant', you will be required to repay a portion of the grant should you sell the home before a pre-arranged date. This repayment also applies to a grant from MHP, a City of Jackson program.

This is not to imply that the Good Faith Estimate is worthless: it should accurately reflect all of the lender and broker costs you incur at closing. And if your estimate of costs is significantly different from your actual costs, you should always investigate the source of the difference, and we'll be happy to help you do so.

I need to bring money to closing. To whom should checks be made out?

A cashier's check on a local bank should be made payable to Roger McGehee, Jr, PLLC, escrow account.

Can I write a personal check?

No. We are only allowed to accept 'good funds'. This means a fedwire or a cashier's check from a local bank.

Should I buy title insurance?

While owner's title insurance is not mandatory, it is highly recommended that buyers purchase an owner's title insurance policy to protect against any potential financial loss should there be an issue with the title to the purchaser's new home. Possible issues include identity theft, liens and judgments recorded just before closing, and mistakes made by the clerk of court – any of which could be catastrophic to the new owner.

In other words, the owner's policy insures that you own your home, and that the ownership of your home is free from any and all covered defects, liens, and encumbrances. Every lender requires a lender's title policy to protect their interest in the property; Lenders, in fact, will not issue a loan without it. The lender's policy, however, does not offer any protection to the property owner. For more information, please see our information on owner's title insurance 'reasons to have owner's title insurance'

For a more thorough explanation of 'owner's title insurance' go to Reasons to have owner's title insurance on our main page.

Have a question you'd like answered? Just call us at 601 982 1000 ext 1 or email to roger@mcgeheelaw.net

So, what exactly are all these papers that you're signing at closing?

You've done a lot to buy your new home. You've looked at house after house, made offers and counter-offers, signed a final contract, applied for a mortgage, been through qualification and underwriting – and at the end of it all is closing.

And it's at closing that you will be presented with a small mountain of paperwork; a stack of legal documents that, while not quite as high as the Mallory Step on Everest, still can be quite daunting nonetheless.

Closing can be intimidating, especially for first-time homebuyers told by their mothers never to sign anything without reading it first. Even for experienced homebuyers, signing the closing papers can be nerve-wracking, and they'll often comment that they feel like they're signing their life away without knowing exactly what they are signing.

There is some good news about closing though: First, there really is no document which signs your life away. Really. The second is that many of the documents are fairly standardized, and are signed at each and every closing.

The documents typically signed at each closing include:">

The HUD-1 Settlement Statement: Also known as the closing statement (or more commonly and simply "the HUD1") this document sets forth all the financial terms of the transaction and includes how much money the seller receives, the real estate agent commissions, and the amount the buyer must bring to closing. A sample HUD1 can be viewed here. Keep in mind that this is a 'sample' and your HUD1 may include more or less items and the money amounts will be different.

The Note: The promissory note is the borrower's formal promise to repay the money that the bank is lending. It shows the amount of the loan, the interest rate, the length of the loan, and the amount of payments. This is usually a 2 or 3 page document and does not require a notary. The note is not filed publicly at the Courthouse.

The Deed of Trust to Secure Debt: This is the document which pledges the property as collateral for the loan. In other words, the deed of trust is what gives the lender the right to foreclose if the loan isn't paid back. This document is usually about 15 to 18 pages and does require a notary. This document is filed with the Chancery Clerk of the county where the property is located.

The Truth in Lending Statement:Also known as the "TIL," the truth in lending statement shows the annual percentage rate of your loan. The annual percentage rate is not your interest rate, but instead is your loan interest rate plus the finance charges you've paid. It also shows the total amount you would pay if you hold out the loan for its full term.

The Occupancy Affidavit:A document by which you swear that you will occupy the property as your primary residence. Alternatively, if you are not planning to live in your new house, it will disclose that it is a second home, vacation home, or investment property. This document requires a notary. You will sign in more than one place swearing that this is going to be your principle place of residence so don't be surprised at duplicitous documents.

The Aggregate Escrow Disclosure: This document shows how your escrow amounts are calculated, when they are being collected, and when they are being paid out on your behalf.

There are also a number of other documents that are typically signed at every closing: papers by which you swear that you still have your job, promise to cooperate with your lender if documents need to be corrected later, and acknowledge that there are no side agreements between you and the seller, that neither the seller, one of the Realtors, the lender or the closing agent has given any money to you to bring to closing as a part of your down payment. On top of that there are usually other affidavits, certifications, and disclosures which may be required by your specific lender. Again, these are all typically very standardized documents and do not differ greatly from closing to closing.

If you'd like to review a sample lender's loan package before closing, simply click here for a conventional loan and here for a sample FHA loan. These sample packages include documents both for you and your closing attorney. While the actual papers you sign at closing will be different in some ways, the form and substance of the documents you sign should be fairly similar to these.

There will also be some additional documents that you will be required to sign. These documents are produced in our office and required by your lender and your title insurance company. Please click here to see samples of these documents.