You found the home of your dreams. Your offer was accepted, the home inspection went well, and the appraisal came in on target. Now, you still have a few weeks until your new house will officially be yours. The last thing you want is an unpleasant surprise when you get to the closing table.
Here are a few tips to help you make sure settlement is a treat when the big day comes — no tricks allowed.
- Get your cash-to-close together. The amount you need to bring to settlement can be sizeable. Make sure you have it set aside before the big day. Cash-to-close typically includes your down payment, taxes, insurance, lending fees and discount points (if applicable). Check with the title/escrow company to find out what payment methods they will accept. Some take cashier’s checks, while others require wire transfers, and some companies accept multiple payment methods. But you need to know ahead of time. You don’t want to show up with a cashier’s check if they only accept wire transfers.
- Have your ID handy. There’s a lot of paperwork to sign at settlement, and the title attorney must verify your identity before the signing begins. Make sure you don’t leave your ID at home.
- Don’t forget your checkbook. You should know how much money you need close before getting to the closing table. But sometimes, smaller, unforeseen expenses — like a partial utility bill — pop up the day of settlement. Make sure to bring a blank check with you to cover any “day-of” expenses.
- Finalize your financing. Even if you got pre-approved before you started house hunting, your financing won’t be finalized until you go to settlement. Continue sending your lender any documents they request to prevent delays.
- Purchase homeowners insurance. You need to have insurance in place on the day you settle. Finding the policy that’s right for you can take time. It’s a good idea to start shopping for insurance several weeks before your settlement date, so you can compare the cost and coverage different insurers offer and choose the plan that’s best meets your needs.
- Don’t forget the title insurance. Parts of title insurance may be optional, but you might want to think twice before skipping it. It can help safeguard you by protecting your ownership rights on the property if someone sues you for something that happened before you bought your home.
- Postpone big life changes—if possible. Your lender will review your finances right up until the day you settle, so it’s important to avoid making any large purchases or taking on new debt. One of the criteria your lender uses to decide whether to approve your mortgage application is your debt-to-income (DTI) ratio. If it’s too high, you may not be approved. The same is true for employment. Your lender will verify your employment right before you settle. Significant changes to your finances or employment status could be your loan approval at risk.
If your closing date is approaching, and you have questions, give us a call today. Your Homeowners Licensed Mortgage Professional will get you the answers you need to help ensure settlement goes smoothly.