Step 8: The closing
Know how to keep your self mortgage worthy
Closing on the contract to purchase your new home should be one of the most memorable experiences of your life. It should be a smooth day, so you need to make sure that you have taken care of all the required tasks leading up to the closing. First and foremost, be sure that all contingencies have been cleared from the contract or dealt with appropriately. Your mortgage should also be completed. Ask your lender for a checklist of steps to closing and be sure to complete each one.
The actual closing will be held at your Title company or lender's office. You will be reviewing document after document and we will be with you to help you with any of the questions you may have.
The entire process may take up to an hour, but being well-informed prior to the closing will help to speed up the process. Preparing for the closing will be done by your lender and us. Just as you confirmed the value of the home you're buying through a property inspection, lending institutions also take cerntain steps before finalizing a mortgage to make sure they are backing a sound investment.
These include:
- An appraisal to confirm the value of the property
- A "site survey" to confirm the lot set backs and that there are no enchroachments on the property
- A title search to verify the ownership of the property and that there will be no title deficencys when you purchase the home
- Title insurance to protet against mistakes in the title search
- Rerun credit to make sure it has not taken a turn for the worse
Chances are good that these final steps- which, incidentally, you will pay for as part of your closing cost- will go smoothly. We want you to remember that the whole point of these preclosing verifications is to look for problems that occasionally arise.
You may be a minor player in the appraisal and title work, but when it comes to finalizing the loan, you're still the star. That's because your lender will check your finances just before closing to make sure you're in the same good financial shape you were in when the lender preapproved you a month or two ago. Your job is to remain that credit-worthy person: keep your descretionary spending to a minium, don't buyer anything on credit, and whatever you do, don't spend your cash reserves.
CAUTION: Don't buy that new car or furniture! Do not add additional debt without checking with you lender first. In most cases this can change the amount of money a lender will lend you. So, if you're planning on financing a car, furniture or vacation (credit card) hold off until after you have closed on the house or property.
Knowing what to expect financially will help make the process smooth and comfortable, we will aid in trying to get you a Closing Statement (or a breakdown of cost needed or owed) a few days prior to closing. Once you have signed all of the documents you will take possession of the property and ownership will be transferred. You now own the home, CONGRATULATIONS!