Tips for a Painless Closing

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The search is over, the negotiations have ended, the home inspection was a success, and the mortgage has been set. Finally, you come to the last step in the home buying process– Closing, or some call it Settlement. This is where the house transfers ownership and the title is in your name, home owner’s insurance is verified, you agree to the terms of the mortgage, and the keys are put in your hands. Once you leave the closing table, you can go to your new home as a homeowner! The build up of all the anticipation for the past few weeks is settled in usually under an hour at closing.

You typically want to estimate at least 2-3% of the sales price of the home for closing costs. You should receive a Good Faith Estimate (GFE) from your lender, which will include an estimate of the funds you need to bring to closing. The primary items at closing include:  the settlement statement (aka HUD-1), the contract, the loan papers, title insurance, homeowners insurance, the Title or Deed, any down payment, and closing costs. It is important that you are adequately prepared when you go to closing. Although your agent will review the information that you need at closing, it’s a good idea to know what is going on in the event you need to handle it alone.

Important items for your closing:

Driver’s License or Government Issued ID:  So the settlement company knows you are YOU

Certified Funds:  You will need certified funds for closing costs and/or down payments. It’s best to stop by your bank the day before closing once you know the exact amount to bring. This is why it’s important to obtain the settlement statement in advance so there are no problems at the Closing table.

Homeowners Insurance Policy:  This should be secured prior to the day of closing for a townhome or single family home.  For a condo, the master insurance policy is typically included in the condo fee, you may want to obtain additional insurance for your property inside the condo.

Settlement Statement:  Typically your real estate agent will look over a copy of the HUD-1 settlement statement within 24 hours of closing. It’s important to review it beforehand because it shows the total amount of cash you’ll need to bring to closing. It also gives you the opportunity to resolve any discrepancies.  If you don’t receive a copy prior to settlement, don’t worry as you will be provided time at the closing table to look it over.

By being prepared in advance, you’ll be far less likely to encounter any unexpected surprises when you’re sitting at the Closing table.

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