One of the most exciting times in your life has finally come to be – your offer has been accepted for your dream home! While holding off on celebrating may be difficult, it is important to not get too ahead of yourself before the keys are officially in your hands. You still need to go through one last final step before walking into your new home.
Closing on a house requires a little bit of waiting time before the house is finally yours. On the closing date that was set during the negotiation and listed on the purchase agreement contract, there are still things you have to do!
With a team of experts like us on your side, we are here to help walk through the necessary checkpoints it takes to officially close on your home. These are known as closing contingencies and they are listed in the contract as things that must be met before making the home purchase transaction legally binding. Below are some contingencies that your contract may include.
- Home inspection – to make sure that your new big purchase isn’t a faulty one, home inspections are necessary to ensure there aren’t any underlying problems that could cause problems after the sale is done.
- Appraisals – For the mortgage lender to ensure that they aren’t lending you more money than what your new home is actually worth, it is required that a professional appraiser estimates your new property’s current market value.
- Final Mortgage Approval – you may have already been pre-approved for a loan, however it isn’t official until you get the final approval on your financing. Your mortgage lender will check up on important financial details like your credit report, employment, bank accounts, and insurance. You may need more paperwork of proof depending on your situation.
- Homeowners Insurance – self-explanatory, homeowners insurance is absolutely crucial in the event that there are any repairs that need to be done or if your home becomes damaged or destroyed and also can include liability coverage. Typically, this can be included in your monthly mortgage payment.
- A Final Walk-through – usually allowed by the contract, this final walk-through is to ensure that everything is up to standard as agreed upon in the contract and that all repairs that were agreed to be fixed, are fixed. If not, they will become your responsibility.
If there is anything holding up the above contingencies, it will delay that official closing of the home and may require more from you than you initially thought. Knowing about what is expected of you before closing will help prepare you for the big financial move. You can expect to pay 3-4% of the purchase price of your home on closing cost fees. Days before closing, your mortgage lender will send you a Closing Disclosure that will list all the final terms and details of your loan that will be important to go over to make sure you have the ability and are prepared. Once Closing Day comes, be ready to pay any remaining closing costs you may have and to sign a lot of papers! These statements will include documents listing the costs related to your home sale, mortgage promise to repay your loan and a mortgage or deed of trust that secures your loan.
This is a big step in your life and is so exciting – just be prepared and informed on what is to come so that you can make closing on your dream home a walk in the park.