Mortgage rates remain historically low as we enter September. The latest numbers from Freddie Mac show that the average for a 30-year fixed-rate mortgage is standing at 2.93%, relatively unchanged
How a buyer can prepare for closing day
Once a buyer has their offer accepted on a home, that’s when the fun begins (depending on your definition of fun). In reality, there’s a bunch of work that has to be done leading up to closing day. Here are 6 tips to avoid any roadblocks in the process:
Obey the budget. While you may be tempted to buy big-ticket furniture items or appliances for your new home, don’t forget that you’ll have to pay closing costs in addition to your down payment. These can quickly add up to thousands of dollars. Instead, consider challenging yourself to furnish your new home without breaking the bank.
Avoid financial no-no’s. Making a career change after you’ve applied for a mortgage, but before you close? Not a good idea. Opening a new line of credit or closing out a credit card during that time? Also problematic. Since lenders will do a second credit check and income verification just before closing, any major financial change can derail the mortgage approval process and delay the closing date. Rule of thumb: If you think it might be an issue, call your loan officer to discuss.
Plot your move: If you’re like most of us, you have closets and drawers full of things you haven’t used in years, and the thought of packing it all up is overwhelming. So, why not use the weeks before your move to purge some stuff while you schedule a moving company? Then, the week before your closing date, score some boxes, confirm your moving date with the movers and do a thorough clean sweep of what’s soon to be your former apartment. Need some guidance? We’ve compiled a helpful checklist.
Skip the checkbook. When you first receive your loan paperwork, you’ll notice an estimate of closing costs. A few days before closing, you’ll be notified of the final closing cost with an itemized list of all fees and charges – thinks like appraisal costs, legal fees, etc. This is the actual amount you’ll need to bring in the form of a certified or cashier’s check — not a personal check. You’ll have to go to the bank to arrange this and since banks have strict hours, make sure you leave yourself enough time before your closing date to secure the payment.
Ensure you’re insured. Depending on your loan, proof of homeowners’ insurance may be required at the closing. So, if you’ve been procrastinating, stop. You must make sure your homeowners’ insurance is secured ASAP. Waiting until the last week may be too late. Depending on your loan, proof of homeowners’ insurance may be required at the closing.
Do a final walkthrough. The final walkthrough is your last chance to make sure the home is in the same condition (or even better if you asked for repairs) before signing the final paperwork. Committing to an exact date can be tricky for the seller because you want the home to be empty, but the seller may not be able to vacate more than a day or two before closing. That’s why some final walkthroughs happen on the morning of the closing itself. Whatever you do, don’t skip it. If you find something wrong after you’ve been handed the keys, it’s your issue to deal with at that point.
What’s the final step in the closing process?
The last step in buying a new home is the day you officially become the legal owner of your new digs. Although it may seem cut and dry, prepare to dedicate a few hours to the closing process.
What will happen?
SIGN: The buyer and the seller will need to sign a variety of legal documents.
PAY: The buyer will pay their closing costs. The real estate agents get paid. The seller will receive their proceeds.
TRANSFER: The property title is passed on to the buyer, and the seller hands over the keys.
What do I need to bring?
A photo ID
Outstanding documents or paperwork for the title company or mortgage loan officer
Certified or cashier’s check made payable to the title or closing company for closing costs and any remaining down payment
A lawyer, if you believe you’ll need help understanding the documents
Closing on a house seems like a considerable undertaking, but if you know what to expect, you can avoid common roadblocks at pitfalls. The secret is to be prepared. As always, enlisting the help of an experienced mortgage professional will help you navigate the process with more confidence. To get started, find a loan officer in the area you’re looking to call home.