You have spent months looking for the perfect home. You found it, wrote an offer and it was accepted! You already provided your lender with your income and asset statements before you even started looking for a home, so you know you qualify. So what else do you need to do except wait for closing? There are actually several things you still need to do before you can put your feet up!
Inspections
The very first thing you need to do is schedule your home inspection. Contracts usually allow a buyer seven to ten days to perform a general home inspection as well as more specific inspections. When you initially wrote the offer to purchase the home, your agent should have advised you on the importance of conducting a home inspection. By checking this option, the purchase is now ‘contingent upon a home inspection’. This is a term that will give you a right but not the obligation to hire the assistance of a home inspector as well as other professionals who can take a close look at the home. After the inspections, you can request that the seller make repairs to the home prior to closing; ask for a repair allowance to be given to you at closing or if the repairs are substantial, you can decide not to go ahead with the purchase. As you can see, home inspections are imperative on a home purchase.
Loan Application
Although you provided your lender with your financial information upfront so that you could be issued a pre-approval letter, it is now time to make formal loan application. Now that you have an address, a sales price and a time-frame you can apply for a specific loan amount and lock in a rate for a specific time period. This should be done within a few days of your offer being accepted and often is preferred to be made after the home inspection but be careful to coordinate and follow the dates in your purchase contract. Your lender will likely need you to provide updated income and asset statements from the last time you turned them in. Once your loan has been processed, there may be additional requirements from the lender as well. Turn in everything as soon as possible so there are no delays with the loan which could cause your closing to be delayed.
Homeowner’s Insurance
If you are financing your new purchase, homeowner’s insurance needs to be in place prior to final loan approval. This is because the lender needs to know that you qualify with the payment including your monthly homeowner’s insurance obligation. Buyers sometimes overlook this requirement or rush through the process which can cause complications or consequences later. Closings have been delayed due to lack of insurance but worse is when a catastrophe occurs to the property and the homeowner finds out they do not have adequate coverage to repair or rebuild without coming out of pocket. Take the time to make sure you are getting the right coverage so that you are protected in the future.
Summary
After your offer is accepted, now the hard work begins! Do your home inspections, make loan application and get your insurance in place so that you are ready for closing. Once you close on your new home, then you can sit in your new yard and enjoy the sunshine!
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