Closing doesn’t have to be painful, especially if you prepare ahead of time.
You’ve passed inspection. Your mortgage is all set up. It’s almost time to break out that “Huzzah!” but you’re not quite there yet. There are a few more steps before you are handed the keys and ride off into the sunset as the new owner of the property. And if you think the rest of the process was daunting and painful, buckle up: you’re about to go through the advent of closing a house.
In a nutshell, before the great key handoff, you are going to want to cover your behind. For starters, you will need to bring it back to earth and protect yourself by making sure you have inspected the property one final time, that any and all contingencies are resolved, and that you have bought insurance. By this time, you’ve already had the property inspected, we know. But, things can and do happen between the most recent inspection and the final closing on the property.
Making one last walkthrough will give you peace of mind that the property is in the same condition as it was when you signed the contract. If anything has changed, you will need to contact the seller immediately in order to resolve outstanding issues before you sign on for the property. You can also request to delay the closing if the agreed-upon repairs aren’t completed. You should also make sure your lender does a title search. This will ensure that there are no outstanding liens or issues attached to the property.
Schedule plenty of time for a meeting.
When you attend a closing on a house, you will need to block out a comfortable chunk of time. An easy mistake is plotting to close during the span of a lunch hour. While a closing can be completed in this amount of time, the standard rule of thumb is to take half or all of your workday off in order to ensure you aren’t rushed. If one of the key players for the signing is running late, you might end up nervously watching the clock. Moreover, because documents can be flawed and might need changing, and questions crop up, you can rest assured that if you’ve set aside enough time, you won’t be panicked on the backend.
Plan to meet mid-month.
Make sure you schedule your closing for the middle of the month, but no later than the 20th day of the month if you can’t swing a mid-month closing. The reason for this is pure and simple: saving money. At the start of each month, closing costs and prepaid interest go up, thus, if you wait until the last day, you run the risk of paying more out of pocket. While it’s a very hopeful and fun time, plan for the worst-case scenario, and if something should crop up during the closing, you will have time to revise or tweak the agreement without being hit in the pocket more.
Double-check for errors in documentation.
You will receive a settlement statement, which includes costs related to the home sale, a mortgage note, or deed of trust, which secures the mortgage note. It is important to review all documents that cross your workspace prior to signing. Look out for typographical errors or misspellings of names. Check the numbers against your mortgage information. Your deposit, which is held in escrow until the closing is successful, will also come into play on that day.
Bring all of your paperwork, checkbook, and a nice pen.
Be sure to bring official ID along with copies of your mortgage agreement, contract, and inspection reports. You will also be expected to bring a down payment, through cashiers’ check or wire transfer. The exact dollar amount will be given one day before closing and could be impacted if you had something in place such as an earnest money agreement. Because nothing is a given, make sure you bring a checkbook with you to cover any last-minute changes. Your closing will take place at one of the following places: the mortgage lender’s offices, realtor’s offices, closing agent’s offices or your local registry of deeds. You will most likely meet with the seller, real estate agents, attorneys and the lender on that day.
Finally, expect to be sitting for a while when you’re closing on a house. Read over each document carefully before signing and point out any issues that crop up. And, if you’re feeling extra excited about the day, you might want to bring a special pen along for all that signing you will be doing. Congratulations!