So you've found a house that you love, you've made an offer on it, and now you're in the closing phase of the purchase. Now what?
You're in the final stretch, but you can't let your guard down yet. Here's the ultimate guide to buying your dream home just in time for the new year.
1. Home Inspection, Appraisal, Financing
The first thing you want to check off your list before closing is taking care of all contingencies. The most common that you will face are:
- Home inspection
- Mortgage approval timeline
The home inspection allows you to have the place professionally inspected before you purchase the home. An appraisal compares the market value of the home to your bid for fairness. The timeline allows you to back out of the deal if you do not get approved for a mortgage within an appropriate period.
2. Clear that Title
You need to do a title search for your mortgage lender and purchase title insurance to protect you from legal claims against the home. If distant relatives try to lay a claim on the house, the title insurance, and title clearing will protect you.
3. Don't Do Anything Financially Reckless
Closing a home deal is an adrenaline rush. It makes you feel on top of the world. Which leads you to make more big purchases. But, cool your jets. You need to get your home loan underwritten.
The underwriter will check your credit score, renew the appraisal, and ensure that your financial portfolio has remained the same since your loan was pre-approved.
To keep your portfolio the same, you need to stay away from big purchases like cars, boats, or other buildings.
4. Read and Re-Read Your Closing Disclosure
Also known as the HUD-1 settlement statement, this document explains your mortgage payments, the terms of the loan, and any additional fees that are present.
Compare the disclosure with the loan estimate that your lender provided. Ask for explanations about any differences.
5. Do the Final Walk-Through You Won't Regret It
Check your contract. In most cases, it will allow you to look through the real estate property one last time before closing the deal, usually within the final 24 hours.
During this time, make sure the property is empty. You'll also want to check on the problems that arose during the initial home inspection.
6. Make Sure You Bring Everything to Closing
Here is a list of documents that you need to bring to closing:
- Your copy of the contract
- The inspection reports
- Loan paperwork
- A Government-issued ID
- Proof of Homeowners insurance
Bring a settlement agent or attorney to guide you through the paperwork you'll need to sign. Review everything before putting pen to paper.
The Home is Yours
Follow these steps and the home is yours. You'll have the keys. The title will be under your name. The storm is over. Now all you need to worry about is interior decorating and settling in.Posted by Pat Leavy on