If you’ve made it to closing, you’re almost ready to call yourself a homeowner.
The closing period begins once your offer is accepted and will last several weeks until you provide your final signature on closing day. Typically, closing periods are between 30 to 45 days.
Closing day, which is also called settlement, is a meeting where final documents are signed, and ownership of the home is officially transferred to you.
During the closing period, follow these key tips to keep your journey to closing day moving as seamlessly as possible:
Getting pre-approved doesn’t just show the seller you’re a serious buyer, it can also help expedite your loan approval process. You’ve already got a good sense of what you can afford and done your homework, which can potentially help you avoid financing issues that delay or halt the closing process because the sale of the home depends on you securing a loan.
Getting a home inspection is a crucial part of the closing process. Major repairs that come up during the inspection, such as plumbing issues or unwelcome pests, should be addressed before you reach closing day. If contingencies are not met before the end of the closing period, the closing date could be delayed.
The upfront costs of homeownership extend beyond your down payment. Closing costs, also called settlement fees, are expenses that you will pay to finalize your mortgage. They include insurance, title fees, taxes and appraisals. Closing costs vary, but you can expect to pay 2-5% of the loan amount. Your lender will outline your closing costs in your loan estimate and ensure that you are prepared for any additional fees. Don’t forget to compare your loan estimate to your closing disclosure, which you will get three days before closing, to make sure there are no unexpected changes.
Before the property is legally transferred to you, the home must have a “clean title”. This simply means the home title has been cleared of any judgments, liens or bankruptcies. Check with your lender to make sure a title search has been completed so that you aren’t left with any outstanding surprises after closing.
You should request a formal walk through the home 24 hours before closing. You will want to double check that all agreed upon repairs have been completed and the seller has completely vacated the property.
Buying a home is a complex process, that is why it’s important to assemble a team of experts to guide you. Before signing your closing documents, your lender with work with you to make sure you understand the costs and terms of your loan. At the closing meeting, you will be joined by your real estate agent, a closing agent, and the seller’s real estate agent. Don’t hesitate to ask questions, it’s their job to advise and protect you.
Closing on a home will likely look a bit different during COVD-19. Depending on where you live, you may be able to complete the entire closing process online using electronic signatures and notary services, but some states require in-person notarization. If you’re not sure what to expect, talk to your team about how COVID-19 has affected the homebuying processes in your area.
Once closing day arrives, it will only take a few hours to sign the final paperwork and have the deed to the home legally transferred to you.
To learn more about what to expect at closing visit My Home by Freddie Mac®.