Closing on a house is the final step in the home-buying process. It’s the day when you sign the papers, get the keys, and officially become a homeowner. But before you celebrate, there are some important things you need to do to make sure everything goes smoothly, and you avoid any last-minute surprises. Here is the ultimate checklist for closing on a house that will help you prepare for this exciting milestone.
Review your documents
Before closing, you should receive a closing disclosure from your lender. This document outlines the terms of your loan, including the interest rate, monthly payments, closing costs, and any other fees or charges. You should review this document carefully and compare it with the loan estimate you received when you applied for the loan. If you notice any errors or discrepancies, contact your lender immediately and ask for an explanation or correction.
You should also review the title commitment, a document showing the property’s legal ownership and any liens or encumbrances that may affect it. You want to ensure that the seller has a clear title to the property and that no outstanding issues could prevent you from taking possession of the home.
Finally, you should review the purchase contract and any addenda or contingencies that are part of it. Ensure that you have fulfilled all of your obligations as a buyer and that the seller has done the same. For example, if you had a home inspection contingency, ensure that you have received and approved the inspection report and that any repairs or credits have been agreed upon.
Get homeowner’s insurance
One of the requirements for getting a mortgage is to have homeowner’s insurance. This policy protects your home and personal belongings from damage or loss due to fire, theft, vandalism, natural disasters, and other hazards. Your lender will typically require you to have enough coverage to equal your loan amount.
You should shop for homeowner’s insurance quotes and compare options and features. You may be able to save money by bundling your home insurance with your auto or life insurance or by choosing a higher deductible or lower coverage limit. However, you should also consider your personal needs and preferences and ensure adequate protection for your home and belongings.
Once you have chosen a policy, you should provide your lender with proof of insurance before closing. You may also need to pay the first year’s premium in advance or set up an escrow account to pay it monthly along with your mortgage.
Conduct a final walkthrough
Before closing, you should conduct a final walkthrough of the property to ensure that it is in the same condition as when you made the offer and that any agreed-upon repairs or improvements have been completed. You should also check that all appliances, fixtures, systems, and utilities are working properly and that there are no signs of damage or defects.
The final walkthrough is also an opportunity to verify that the seller has removed all of their personal belongings and left behind any items included in the sale, such as window treatments, light fixtures, or appliances. If you find any problems or discrepancies during the final walkthrough, you should notify your agent and try to resolve them with the seller before closing.
Prepare for closing costs
Closing costs are fees and expenses associated with finalizing your home purchase. They may include appraisal fees, title fees, origination fees, recording fees, taxes, prepaid interest, escrow deposits, and more. Closing costs can vary depending on your location, loan type, purchase price, and lender, but they typically range from 2% to 5% of the loan amount.
You should receive an estimate of closing costs from your lender before closing. You may be able to negotiate some of these costs with your lender or seller or ask for a credit or discount. You may also be able to roll some of these costs into your loan balance or pay them with a gift from a relative or friend.
You will need to bring a certified check or wire transfer for the amount of your closing costs to the closing table. You may also need to bring additional documents, such as proof of identification, proof of funds, proof of insurance, and copies of your contract and disclosures.
Consult with your agent
Your real estate agent is your best ally during the closing process. They can help you coordinate with your lender, title company, inspector, appraiser, attorney, and other professionals involved in the transaction. They can also answer any questions about the documents you must sign or the procedures you must follow.
Your agent can also help you prepare to move into your new home by providing useful information and resources. For example, they can give you tips on how long it takes to close on a house, how to transfer your utilities, how to change your address, how to find local services, and more.
Your agent can also help you celebrate your new homeownership by giving you a gift, a card, or a referral to a great restaurant or activity in your new neighborhood. Don’t forget to thank your agent for their hard work and dedication and to leave them a positive review or testimonial.
Enjoy your new home
Congratulations! You have successfully closed on your house and are ready to move in and make it your own. This is the time to enjoy the fruits of your labor and celebrate your achievement. You may want to throw a housewarming party, invite your friends and family over, or simply relax and unwind in your new space.
However, don’t forget that owning a home comes with responsibilities and challenges. You must maintain your home, pay your mortgage and bills, deal with repairs and issues, and cope with unexpected events. You may also want to make some improvements or renovations to customize your home to your taste and needs.
To help you with these tasks, you may want to check out some of the best home improvement websites that offer advice, inspiration, and resources for homeowners. You may also want to join a local community group or association that can connect you with other homeowners and provide support and assistance.
Closing on a house is a big deal, but it doesn’t have to be stressful or complicated. Following this checklist ensures you are ready and prepared for this important step in your home-buying journey. And remember, you are not alone. Your agent, lender, and other professionals are there to help you along the way. Good luck, and happy closing!