Coming in on the Close: What You Should Know Before Closing Day

Closing on a new home can be an exciting time for a first time home buyer. Unfortunately, this part of the home buying process can be one of the most stressful times, as well. Facing closing costs and your new monthly mortgage payment can be pretty scary, especially for your wallet. Not to mention the fear of finding problems with your soon-to-be home while going through the various inspections needed before you move in. Familiarizing yourself with the closing process can help the first time home buyer avoid big headaches and start enjoying his/her new home sooner.
Set a closing date so you’ll have a way to measure the time you have left to complete certain tasks, like finding homeowner’s insurance, or setting up an inspection. However, be sure to keep in mind that many times, a closing date can be set and reset due to delays in paperwork. As there is not much you can do about this, patience is the key to overcoming this grievance.
Understand your loan package prior to signing off on it. There can be a lot of corrections to your loan offer in the weeks leading up to your closing date. For instance, your home inspection may have found glaring problems that need to be corrected. Make sure your loan offer reflects these changes before you close on a house.
At this point, the home buyer should have the title to the house searched to ensure the seller is the rightful owner of the property on sale and that there are no liens on it, and then acquire title insurance should an issue arise after the close. A comprehensive title insurance policy will protect both the lender and the buyer from a bad title.
A new homebuyer will also need to buy homeowner’s insurance in order to obtain his or her mortgage. Proof of the insurance is often required prior to closing. Homeowner’s insurance protects both the owner and the lender from damages that could potentially occur to the property.
After the necessary insurance has been obtained, the home buyer may schedule a final walk through, which is not to take place any more than 24 hours before closing day. This walkthrough should ensure the buyer that the house is in proper order and that the seller has maintained his/her end of the bargain in terms of the condition and the quality of the home. If certain things are not in order as promised, hold the seller accountable for repairing them before that contract is signed.
Finally, review your Good Faith Estimate— an approximation of your closing costs provided to you by your lender about three days after you’ve been approved on your loan— so that you have a good idea of the amount of funding you should have available come closing time. This way, there are no surprises, and therefore, no financial stresses to deal with when you’re asked to make the payment.
Keep in mind that your realtor, your attorney— should you opt for one— and your lender are all professionals that you’ll have by your side should you be confused about any aspect of the process. Don’t be afraid to ask questions and voice your concerns.
The preceding information has been provided to you by the White Picket Fence Home Buying Institute. For more information on home buying, or on the closing process, visit goo.gl/ZDH7b.