What Steps are Needed to Prepare for Closing on Your New Home?

closing-paperworkThe time between agreeing to the sale and closing and taking possession of your new home can be busy. Here's a summary of some of the steps usually required.

  • Obtain your financing. If you've shopped for a home the FoolProof way, then you've gotten a pre-approval for a mortgage from Summit Credit Union or another lender. When you reach a purchase agreement, you simply have to complete the application process. In addition to assessing your credit worthiness, the lender will check on the value of the property, typically ordering a property appraisal and a title search, for instance. The lender will also require that you obtain lenders title insurance.  Owners title insurance is optional.

  • Arrange for homeowner's insurance on the house. Lenders will also require that you insure the property, but smart homeowners already know such insurance is a must. Rather than just get the bare minimum, consider insuring your home for the cost to rebuild it at the current time. Such insurance may cost a bit more but can best protect your investment. If your house is in a flood plain, you will need to purchase separate flood insurance, which is sold by insurance agents but provided by the federal government. Private insurers offer earthquake insurance for homes in some areas and of certain types of construction.

  • Arrange for title insurance. In most states the seller or seller's agent arranges for the purchase of title insurance. In other states, although the seller must present a house with a good title, the buyer is expected to confirm this with the purchase of title insurance. Request the opportunity to review a copy of this policy before the day of closing; have your real estate attorney or buyer's agent review it, too.

  • Arrange for a final walk-through just before closing. Smart buyers arrange for a brief walk-through the house, with their home inspector if appropriate, to see that new construction has been properly completed, that repairs have been made, and that the home is in the promised condition (though rare, sellers have been known to strip a home of appliances, light and plumbing fixtures, and trim hardware, although those items were covered in the sales contract).

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