First-time home buyers are often carried away in the excitement of owning their home that they usually fail to pay enough attention to the home closing process. It isn’t a surprise too; at this stage, home buyers are probably busy with several tasks, such as arranging a move, packing things, or even settling matters at work especially if the new location takes them farther from the office.
Although closing is the last step when purchasing a home, a lot of things still have to be done, the majority of which is transferring funds and exchanging essential documents. Below are some things you need to get ironed out when you’re closing on a home.
Home Closing Process: 6 Things You Need to Settle
The down payment for your new home is the largest amount you’ll have to settle at the closing stage if you’re not paying for the total value right away. Whether it’s 20%, which is the usual among lenders, or something as low as 3% if you’re getting an FHA loan, your down payment should be a non-issue by now. Take note though that less down payment means bigger mortgage payments later on. Hence, it’s better if you can settle the usual 20% down payment or more, instead of going for the lesser options.
A lot of fund transfer happens at this point, and a huge part of that is the loan proceeds. These are the funds that cover the remaining amount once the down payment has been taken out of the equation, and which will correspond to your monthly mortgage, plus interest. The lender should provide you with details such as the initial interest and the total loan amount without any fees, and inform you when the proceeds have been forwarded to the real estate company.
In real estate, doing a title search means researching public records to establish a property’s legal ownership and see if there are claims on it. Consider getting the help of your real estate attorney for this.
This one goes without saying; closing on a home means having to pay a lot of fees, many of which you probably haven’t heard about if it’s your first time to close on one. There are administrative fees, application review fees, appraisal fees, and more. Expect to see some lender junk fees too; these are charges that the lender impose when closing on a mortgage.
The actual closing usually happens in the office of the real estate lawyer involved, particularly when the buyer will be paying in cash, but that isn’t always the case. In states where witness-only closing is allowed, the attorney or attending notary provides the necessary paperwork but has no obligation to explain anything about the documents. As for buyers financing a home through mortgage, it’s common for both parties to do the closing at a settlement agent’s office or at the lender’s.
Walkthrough and Closing Papers
Before signing the closing papers, buyers are also given the chance to do a final walkthrough. During the walkthrough, check if there are additional damages to the property and make sure that any noted repair has been completed. Also, see if all elements included in the purchase are still on the property.
Feel free to reach out to us here at Las Vegas Real Estate (LVRE) if you need any assistance on finding and closing on your first (or second) home. We’re one of the city’s trusted brokers and our team of licensed and experienced real estate agents can make home buying a hassle free experience for you.