Summer is just around the corner! Which means warmer weather, family vacations and peak homebuying season. Navy Federal Corporate Economist Alan MacEachin predicts 1.75 million homes will be sold this year between June and August. If you’re looking to make a move this summer, a home closing could be in your future. Here are seven ways you can ensure things go smoothly.
1. Review, review, repeat
The Closing Disclosure – a document that provides the final details about your mortgage loan – must be provided by your lender at least three business days before your loan is executed. Reading the fine print might seem tedious, but you’ll need to review everything carefully to check for errors. Compare that form to the Loan Estimate (LE) you received when you applied for your home loan. Double check your mortgage rate information, loan terms – even proper spelling of your name. Taking the time to read beforehand can prevent fixable errors before closing day. A closer look at the documents will also remind you how much your closing costs are so you can prepare those funds.
If you see something that isn’t right, contact your lender or your attorney as soon as possible.
2. Handle home repairs
At closings, it’s not uncommon for repair disputes to surface. If you’ve had an inspection done already and the seller has agreed to make some improvements, discuss a set timeline in advance. You’ll want to ensure that these are complete well before closing day (at least a week) so there’s a buffer in case work is delayed. Also, try and get a final walk-through scheduled the day before closing to ensure that everything is as it was agreed to, both inside the home and around the property.
3. Conduct a title search
Have your title company or closing agent conduct a preliminary title report – especially if the sellers were foreclosed on or faced bankruptcy. This will tell you if the home or property is subject to any liens, like a contractor’s lien for renovations or even a delinquent mortgage. Even purchases like major appliances or fuel/waste storage tanks can sometimes be unpaid liens.
4. Seal the mortgage deal
Double check that you’ve provided everything to your lender on their mortgage checklist: pay stubs, tax returns, etc. If you have any potential credit or employment gaps or issues, disclose them to your lender and ask them how best to proceed. You don’t want those to prevent the money from being transferred to the seller on closing day. Don’t forget about those closing costs – typically 2–7 percent of the price of your new home. Your mortgage company will require proof of your down payment and closing cost funds before you seal the deal. Make sure those are readily available in an account so they can be transmitted electronically or sent via cashier’s check for closing.
If you’re wiring the funds instead of a cashier’s check, make sure you understand your bank’s procedures for external transfers in advance. You might have to initiate the transfer a few business days ahead of time to ensure the funds actually arrive on closing day.
5. Get things good to go
Contact your lender a few days before closing. It’s not uncommon for lenders to need some last-minute information from you. Also, on closing day, check with your closing agent to ensure they’ve received your loan documents. Being proactive can help prevent delays, especially when you’re organized.
6. Ask questions
Your lender and closing agent are there to help – it’s perfectly okay to ask them anything and everything! It may help calm any last minute jitters you have about finalizing the process. In the excitement of the process, documents could easily be misplaced or signatures forgotten. Being proactive lets them know you’re on the ball and helps prevent any human errors from delaying closing.
7. Leave some wiggle room
Closings can take 30 minutes to a few hours. There’s no way to know how it’s going to go until you get there. Plan more time than you expect you’ll need to get your down payment check, get there on time, and exchange all the necessary documents.
Borrowers should try to schedule their closings for earlier in the day to help prepare for any unexpected delays. You won’t want to wait until the last day on the contract to close. That being said, you shouldn’t try to squeeze your closing into a lunch break or open meeting slot. If you’re able to take the day off, or a half-day, the extra time should give you some wiggle room.
The homebuying process is a marathon, but closing is the home stretch! Thinking ahead, asking questions and staying organized will help you avoid any pitfalls on the big day so you can get moving and settled in no time!
Federally insured by NCUA. Equal Housing Lender.