Closing on a house is an exciting time for a home buyer and we are here to help you through the process. Being so close to the finish line can be daunting so it’s best to be prepared for anything. Having all your ducks in a row will help the closing process go smoothly and quickly, but you’ll have to be prepared for the final steps. You’ll want to make the most of your time now to ensure you’re ready to go. That’s why we have put together a home closing checklist so you won’t have to!
Things to Consider When Closing on a House
There are a few important things to consider before closing on a house, like costs and timeline. Closing on a home costs vary depending on where you are in the country. According to ClosingCorp, national average closing costs can set you back $3,339 not including taxes. Depending on what state you are closing on a house, costs can increase up to $12,847 when taxes are included but the average is $5,749. Your lender should provide you an estimate of the closing costs in the beginning of the loan process and again when closing on a house.
You have options when dealing with closing costs. You can pay upfront or choose to roll closing costs into the mortgage, also called a no-closing cost mortgage. If you chose this route, remember that interest will be added to the closing costs so you may end up paying more in the long run.
On average, closing on a house takes up to 47 days. Before beginning the home buying process, it’s always a good idea to have a mortgage pre-approval in place. Not only does this demonstrate that you are a serious buyer, but that your finances and credit history have already been verified and eligibility has been predetermined. You can move forward with a clear idea of how much you can afford.
How to Prepare for Closing on a House
What does preparation look like? It should include gathering all documentation requested from the loan officer. This will help speed up the process, since there may be last-minute changes that you weren’t expecting. For this reason, it’s best to avoid making any last-minute changes like getting a new job, opening a new credit card, or making large cash deposits. The lender will have to verify your employer so this will cause issues.
There will be a couple of things you should be prepared for and those include signing legal documents and paying closing costs with escrow fees. At your meeting, you can expect the following people to be present as your closing on a house:
- Closing agent
- Title company representative
- Home seller
- Sellers real estate agent
The closing agent may be the same as the attorney or both you and the seller may have an attorney present representing each of your interests. Regardless of who is represented, it’s a good idea to have one at the time of closing on a house. The closing agent will conduct the meeting to ensure all documents are signed and fees paid. Make sure that you read and understand all documents carefully before signing them. Your signature will indicate that you understand the terms and conditions of the mortgage before ownership of the property is transferred to you. Closing costs and fees are typically paid with a wire transfer of funds or cashier’s check. Personal checks are not permitted.
The Ultimate House Closing Checklist
- Contingencies – There are typically a number of contingencies you must address before closing on a house. The first most common contingency is the home inspection. This gives buyers the right and opportunity to have the home professionally inspected before purchasing. When you see anything wrong, missing, or out of place, you can put in a request to have it fixed prior to closing. The average home inspection will cost you between $300-$500, which is minimal to costs that could incur should you choose to waive this step. The next contingency is the appraisal. The individual conducting the appraisal is hired by the lender to approximate the fair market value of the home. If it is less than the sale price of the home, you’ll have the ability to revisit negotiations or back out of the deal without repercussions. The final contingency is financing. If the approval falls through, you have the ability to back out of the deal.
- Title – When you purchase a property, the title is transferred to you. During this time, distant relatives will resurface to claim ownership and indicate that the original owner had no selling rights. It’s important to clear the title and purchase and take legal ownership that indicates you are the rightful owner on public record. Purchasing title insurance and conducting a title search will take care of these issues. You are entitled to choose the title company you want to be insured with and may elicit referrals to find what suits you best.
- Approval – After making the down payment, the loan will go through the underwriting process. The underwriter’s job is similar to a detective. They need to make sure you’ve represented yourself and your finances truthfully and that no false or misleading claims have been made in applying for a home loan. During this process, the underwriter will check your financial history and your credit score since the initial pre-approval. Since this is such a crucial part of the process, you won’t want to make any major purchases that will affect your credit score or financial history.
- Disclosure – Also referred to as a HUD-1 settlement, the disclosure is an official document that outlines the terms and conditions of the loan. You’ll want to read this thoroughly before closing on a house. It will provide critical information on your loan payments, interest rates, and any additional fees you will need to pay for the life of the loan. You’ll want to discuss any discrepancies or questions you may have with the lender at this time.
- Walk-through – Most contracts will allow you to do one final walk-through within 24 hours before closing on a home. This is your final chance to double-check the condition of the home to report last-minute changes or repairs needed. The home inspection should cover any issues that you may have with the home and they should be addressed before moving in.
- Documentation – Be as prepared as possible. Make sure to bring with you these important documents:
- Homeowners insurance
- Contract with the seller
- Home inspection reports
- Bank paperwork
- Government-issued ID
Real Estate Agency Phoenix, AZ
There are factors that can delay closing on a home in a timely manner. A very common issue is a repair that has gone unaddressed. An additional delay can include a lien on the title that the seller is not aware of but must be satisfied prior to finalizing the sale. If paperwork is lacking, this can also delay the process. During peak seasons, the volume of home buying can also cause significant delays in the process.
Are you ready to buy or sell a home? As the leading real estate agency Phoenix AZ, we can help with all aspects of a home closing checklist. From start to finish, we’ll be right beside you providing guidance, advice, and expertise on the neighborhood and home you are interested in. Our team prides itself on delivering timely results and customer satisfaction.
Call our agency today!