One of the most exciting times when buying a home is reaching the closing day. You have done inspections; you have your insurance ready, and now it’s time to make everything final. Even though it’s tempting to want to rush the final steps to get the job done, it’s very important you completely understand the process to avoid any last minute deal breakers. If you are buying a home with a loan, the closing of your loan (and the closing of your home purchase) become official once you meet and sign all the necessary paperwork. After this, you are now officially responsible for the mortgage.
Patience is probably the most important thing to bring with you on closing day. The reality is that you can’t always predict how things will happen as buying a home involves many variables. This is simply the nature of doing this type of business. You can reduce the risk of things going wrong, you just have to know what to expect going in and prepare ahead of time.
1) General Tips:
- Don’t close on the last day of the month – It’s not uncommon for a delay to happen, you want to leave a couple days open in case something occurs
- Bring all documents collected throughout the process – Bring all documents collected in the home buying process, you never know what will be needed.
- Read everything, it’s important! Did you know that your payments could change overtime? Even with a fixed rate mortgage. Taxes or insurance can change monthly payments. Don’t sign anything unless you fully understand the loan terms.
- Do the final walk-through of the home – Damages can happen from contract to closing. If you are allowed a walk-through before the closing date, (usually 24 hours) make sure to take advantage. These issues will need to be settled during the meeting. You can’t ask for repair money from the seller if you neglect this step.
2) What about Closing Costs?
As a homebuyer, you are generally required to pay all costs associated with the transaction of the home. These are called the closing costs. A term you always hear on TV shows about buying a home. Common closing fees include:
- Appraisal fees
- Tax service provider fees
- Title insurance
- Government taxes
- Prepaid expenses: property taxes, homeowners insurance, etc
The list can include many things and it all comes down to how the terms are worked out. Even if the seller doesn’t include the costs directly, they will be worked into the deal somehow. You will receive a statement from your lender giving you an estimate of all these costs. Things can get confusing because there is no “standard” fee and the lender is not in control of all the fees either. The most important thing to know going into closing costs is what the lender actually can control and what they can’t.
3) Who Are All These People?
You spent a good amount of time getting to this point of the process, it would make sense to not try and rush things now. If you are buying your home with an agent from EGA Homes, you should well informed of the process and prepared exactly for what is going to happen. Don’t be surprised at the number of people who show up. It’s not uncommon to see a representative from the title company, an attorney from both the seller and the buyer, the seller and buyer’s agent, and the seller themselves.
4) What to Bring to Closing
- Cashier Check- Don’t bring cash! You will be paying the down payment on the home (if any) and any closing costs. This information about who to pay and how much will be given to you before by your agent.
- Your Team – This is usually just you and your agent. But if you have attorney, they will be present as well.
- Photo ID- This is needed for escrow
- Proof of insurance – Generally the lender will require only enough to cover the replacement value of the home, but you will be able to shop for different types of policies and coverage.
5) Closing Documents
Once you end the meeting, you will receive the following:
There could be over a dozen different documents you could end up signing. Others also include: HUD-1 Settlement, Abstract of Title,Warrant Deed, etc.
Once this step is complete you will now hold the keys to your new home! Also a very healthy stack of new documents you will want to keep for future records.