You’ve finally found the home of your dreams, you got approved for a mortgage, and you negotiated a good deal. Now, only one final step, one last hurdle, remains. And that is closing – where you finalize the largest transaction and biggest purchase of your life up to this point. This is when the anxiety and second-guessing begin to set in. You can, though, make getting past this final hurdle much less stressful. Just use these tips for a stress-free closing on your Redlands property.
Select Closing Date Carefully
The first thing you can do to have a stress-free closing is to select your closing date carefully and wisely. Although the title company and maybe your lender will try to set a closing date, it is ultimately your choice. What works best is to set the closing date as close to the end of a month as possible. And the reason is that by doing so you will wind up paying and proving less at closing.
The main reason for this, according to the real estate experts, is that you “pay interest on your loan in arrears. For example, your October mortgage payment pays the interest for September. When you close on a loan, you don’t make your first payment until one month after the last day of the month that you closed. So closing on August 29th would make your first payment due October 1st. . . If you choose a date as close to the end of the month as possible, it will lower the amount of assets you must verify to close on the loan.”
Get Insurance Early
Another tactic for a stress-free closing on your Redlands property involves purchasing all the necessary insurance early on. You will certainly have to have your homeowners insurance and possibly other coverage. So find out ahead of time whether the home is located in, say, a flood plain or hurricane-prone area because you’ll likely need insurance coverage for these potential natural disasters.
Talk to friends, family, and industry professionals to get recommendations, and then get quotes and compare rates. Your local real estate agent, who understands the local market, can be an invaluable asset here. (To find out more, call (951) 232-9704.)
Organize Your Finances
Another stress reliever at closing is to have all your finances well organized and easily verifiable. “Any money you bring to closing,” industry pros say, “must be verified. If you have money in several accounts, it could cause a paperwork nightmare for the lender and/or the title company. It’s best if you keep all of your money you’ll need to close on the loan in one account. This gives the lender and/or title company one account to verify.”
In addition, doing this will further promote a stress-free closing because you can more easily keep track of all the loan-related deposits. Keep in mind that the lender will track deposits to make sure “the money comes from your own sources and is not a loan that you must repay.” Lenders will often ask for more information to make sure this is the case.
Find Out Costs Ahead of Time
Besides needing to have proof of homeowners insurance at closing, you will also have to provide proof that the taxes have been paid and are up to date. Being informed about such costs is a great way to avoid unpleasant last-minute surprises, thus making for a stress-free closing on your Redlands property.
Typically, your lender and/or the title company will arrange payment of the taxes for you. “But if you don’t know how much they cost, you could be in for an unpleasant surprise when they tell you the total of what you owe.” So find out well before closing how much you will need to cover this cost.
Also, if the tax bills have already been sent out, you may wind up being responsible for the taxes for the rest of the year at closing. Again, consult your agent to find out about this so you can be prepared on closing day.
Carefully Examine Closing Documents
And do be sure to carefully read and evaluate all the closing documents – if, that is, you want a stress-free closing. You can’t just assume that these important, legally binding documents are correct and error free. So it falls to your (and possibly your real estate attorney) to make sure they are.
First, carefully review the Closing Disclosure, which details all the financial aspects of the transaction, including “the new loan amount, the money you must bring to the closing, and any other dollar figures that are affecting the transaction.” And then you’ll want to be sure to review the Mortgage Deed, as well as all other pertinent documents, before signing anything. Your agent and/or attorney can help you make sure all these documents are in order.
Use a Qualified Local Agent
Local laws governing closing can vary. So it pays to use a qualified local agent to ensure all the closing steps and documents are in compliance with local regulations. Closing, then, doesn’t have to be an anxiety- and stress-ridden process.