Once you have completed your loan application you will have 30-45 days until your loan closing in many cases. It may seem like an eternity at the moment but the time flies by. There are several key things to be doing between your loan application and loan closing.

Buying a Home in Minnesota Step 6: Between Loan Application and Closing

Home Inspection

In almost all cases in Minnesota, buyers will make their purchase offer contingent upon a satisfactory home inspection. The home inspection is generally required to be done within a few days after you have reached an agreement to purchase the home.

The home inspection is very different from an appraisal because an appraiser reviews the home primarily for value, while a home inspector invests their time entirely on the quality of the home.

While it is not required in the loan process, I highly recommend the use of a home inspector. I’ve seen several buyers avoid major financial problems through the use of an inspector. While a home may seem in thoroughly great condition, a home inspector is trained to find significant flaws. If they raise a problem that you are concerned about, you have the right to return to the seller with your concerns. The contingency on the purchase contract generally allows you to cancel the agreement at this point if your inspector determines that there are major flaws in the property.

Home Insurance

You will need to shop for homeowner’s insurance which protects your investment from catastrophes. It is usually a good idea to shop for your insurance early, and to obtain two or three quotes for coverage for the property.

While your home insurance will be paid for through your escrow account, you will need to buy one full year’s worth of insurance at the point of closing.

Your insurance agent may or may not require a copy of the property appraisal and if they do, they simply need to contact me for a copy.

Loan Application Do’s and Don’ts

Remember this: at your loan closing you will need to re-sign the loan application with the financial data we collected in the beginning. By signing it you are stating that your financial situation is essentially similar to the date of loan application. Why is this important? If your financial situation is about to change significantly after application be sure to contact me right away. For example, if you just found the car of your dreams and now you want to take out a new loan—I’ll need to re-run your debt ratios to make sure you can afford it. Or if you want to spend your down payment on some furniture for your new home—call me and I’ll remind you not to!

You’ve come a long way since when we first met you got preapproved! Now it is time to go to your loan closing.