Moving day is almost here. There are a few details you need to take care of to make sure that the purchase of your home stays on track, from contract to close.
You will need to be sure that you have homeowners insurance, and you may be required to have flood insurance if the property is in a flood prone area. You will also need title insurance. Title searches are ordered by the attorney or closing agent – if you are not sure, check with your realtor how this is done in your area. Sometimes there are hidden clouds on the title – a claim to the property which can arise as a result of a previous deed not being properly recorded, a forgery, a mistake. A title search company will guarantee the results of their search, and title insurance provides the protection of having your title to the property defended if such a rare occurrence happens in the future.
Now that your title search is clear, and you have made arrangements for homeowners insurance, you are waiting for the mortgage commitment. Sometimes a mortgage company will ask that certain conditions be met before they issue the commitment. They may ask you to verify employment or to provide further documentation of assets. It is very important that you comply with these conditions in a timely manner, or your closing could be delayed.
The mortgage company will conduct an appraisal. Usually your real estate agent will work with the appraiser to gain access to the house, and to assure that the comparison data of recently sold homes is adequate. Your realtor will also work with you to keep track of the day to day details necessary to get to a successful closing.
While the property is under contract, you must not jeopardize your possibility of getting the mortgage. That pre approval that you got is NOT a mortgage commitment, or an iron clad promise to lend you money. If you were going to make a major purchase, such as a car, or anything that could seriously affect your credit rating and your FICO score, wait until AFTER you close on the house. Mortgage companies will run a credit report prior to issuing a commitment, and if your credit score has dropped significantly, they may refuse to give you a mortgage.
Also, once you have applied for a mortgage with a reputable company, don’t decide a few weeks before closing that another company can give you a better rate and change! The time to shop for a mortgage is before you make the offer on the house, not when you are under contract. The “better rate” company may not have time to issue the commitment, or they may economize on service to attract you with advertising!
Just prior to the closing, make sure your realtor schedules a final walk through of the property. Ideally this is done the day of the closing, after the sellers have moved, but before the closing. You want to verify that the house is in the condition it was when you first saw it, or that agreed upon repairs have been made. You will verify that all major systems of the house such as heating, electrical, plumbing, are in working order. You will also verify that items the sellers agreed to leave, such as appliances and light fixtures, are there. And don’t forget to get the utilities ordered for yourself!
Depending on the custom in your area, the closing will usually take place in an attorney’s or title company’s office. You will have an opportunity to look over your mortgage documents, your closing statement, and you will write a lot of checks and sign a lot of papers! Be sure that you have planned for how to pay for closing costs such as mortgage fees, attorney’s fees, title search and that you know what to expect. The Real Estate Settlement Procedures Act requires that your mortgage company give you a good faith estimate of closing costs related to your mortgage, but be aware that these are estimates. Make sure you know what fees to expect from your lender at closing, and be ready to pay them if they were not included in the loan itself.
Pick up the keys, and move right in! Congratulations, you are a homeowner! Enjoy it!