By | closing, home buyer, real estate
So, you’re almost the owner of a new home! This is a very exciting time and you should be proud of all your hard work thus far. However, there are still a number of very important steps you must take before attending the closing. We at Champion Title know how confusing and overwhelming this process can be, so below we have outlined a homebuyer’s checklist before closing on a home:
Square Away the Contingencies
You will most likely have a number of contingencies that you will need to sort out before the transaction is complete. These are conditions that must be met before the transaction becomes official. A few common ones include:
Home Inspection Contingency: This provides buyers with the option to have the home professionally inspected before the closing. Once the inspection is complete, buyers can request the seller to fix any of the issues that were found, or they can back out of the deal.
Appraisal Contingency: Your mortgage lender hires a third party to conduct an appraisal of the home, evaluating the value of the home by comparing it to others on the market. If the appraised value comes out below the listed price, you can back out of the deal as well.
Financing Contingency: If your mortgage approval falls through, you will be allowed to back out of the deal with this contingency.
Get the Title Cleared
Upon purchasing a home, you will take title of it and be granted legal ownership of it. During the closing process, your mortgage lender will require a title search. This will verify that the seller has the legal right to transfer ownership of the property and to make sure there are no errors or disputes on it. Getting title insurance protects you from these defects or problems with the title in the transfer of property after you purchase the home. In simple terms, title insurance protects you if, after you’ve purchased property, someone comes forward to say they had a lien or other rights to the property, alleging that the seller who sold it to you didn’t own it free and clear.
Since you are the homebuyer, you get to choose the title company. We recommend choosing us, Champion Title and Settlement Services, to help with your closing. We are a full-service title insurance agency providing title insurance and closing support to streamline closings and increase compliance for our diverse clientele including homebuyers. For more information, contact us today!
Get the Final Mortgage Approval
Your loan will have to be evaluated by an underwriter before you can close on the home. The underwriter will closely analyze your loan application, making sure everything about you and your finances is accurate. Specifically, the underwriter will review your credit score, home appraisal, and financial portfolio — to see if it has changed from the date you got pre-approved for a loan. To be safe, you should not do anything that can negatively impact your credit score, such as making a big purchase or missing a payment.
Look Over Your Closing Disclosure
When getting a loan, it is vital that you carefully look over your loan disclosure or HUD-1 settlement statement. This document will contain the loan’s terms, your mortgage payments, and closing costs. Once you have looked this over, compare it to the loan estimate that you previously received from your lender. If anything looks abnormal, ask your lender to explain it. It is best to ensure you understand all of the contents of this document.
Do a Final Walk-Through of the Home
In most cases, the sales contract will permit you to do a final walk-through of the house the day before the closing. You’re going to want to do this, as it can grant you the reassurance that everything looks as it should. For example, if the home inspection called for repairs, you can make sure that the seller had them done.
Attend the Closing
Now the moment you have been waiting for — closing day. Be prepared to sign an ample amount of paperwork. The closing agent or attorney will be there to help guide you through it all. Be sure to bring the following items with you:
-Proof of homeowners insurance
-A copy of your contract with the seller
-Your home inspection reports
-Any paperwork the bank required to approve your loan
-A government-issued photo ID
Once all the paperwork is complete, you will officially be a homeowner!
