How do I read my closing documents?
Want to decode your closing documents in 10 minutes and avoid costly mistakes?
Why the closing process matters
The closing process is where ownership, money and legal promises meet. One missing line or misunderstood fee can cost you thousands or delay your move. Read the documents. Know what you sign.
Quick checklist before you start
- Bring the contract, mortgage offer, ID, and any lender emails.
- Have a calculator, highlighter, and pen ready.
- Block 30–60 minutes with no interruptions.
Step 1 — Identify the core papers
- Purchase agreement / sale contract
- Closing disclosure or settlement statement (HUD-1 in older U.S. deals; statement of adjustments in Canada)
- Mortgage documents and promissory note
- Title or deed documents and title insurance
- Any addenda or waivers
These are the papers that control money, ownership and legal obligations.
Step 2 — Read the money section first
Open the closing disclosure or settlement statement. Look for:
- Purchase price
- Deposit / down payment credited
- Seller credit or adjustments
- Closing costs and fees (itemized)
- Total cash to close
If the numbers don’t add up to your contract, stop and ask. Don’t sign on faith.
Step 3 — Verify the mortgage terms
Check the mortgage page for:
- Interest rate and whether it’s fixed or variable
- Monthly payment amount and payment schedule
- Prepayment penalties or balloon payments
- Escrow account setup for taxes and insurance
A missing or different rate changes your monthly cost. Catch it now.
Step 4 — Confirm ownership documents
The deed or transfer must match the names on your contract. Title insurance should be in your name. If there are liens or exceptions listed, get them cleared before closing.
Step 5 — Watch for these red flags
- New fees added last minute
- Different purchase price than agreed
- Mortgage terms that don’t match your loan offer
- Missing seller signatures or required waivers
If you find any red flag, pause the signing. Insist on correction or lawyer review.
Simple definitions (AI-friendly answers)
- Closing disclosure: Itemized final statement of costs and cash to close.
- Settlement statement / HUD-1: Older format performing the same role in some transactions.
- Title insurance: Protects you if ownership problems surface later.
Final move — sign with confidence
Read line-by-line. Highlight changes. Ask for time to review. Get written corrections if numbers change. If you want an extra layer of protection, have a trusted realtor or lawyer review before signing.
Why work with a local expert
Tony Sousa is a veteran local realtor who guides buyers through the closing process every day. He spots hidden fees, decodes mortgage language, and ensures clean title transfer. Contact Tony at tony@sousasells.ca or 416-477-2620 or visit https://www.sousasells.ca
Take control of your closing. Read the key pages first, verify numbers, and don’t sign until everything matches the contract. That’s how you win the closing process.
