4 Important Tips to Close Smoothly
There are changes coming to the mortgage business soon. With these 4 important tips to close smoothly you will be able to save yourself time, money and aggravation.
1. Starting August 1, 2015, closing accommodations are changing, and making sure you are aware of these changes will make your home buying process less stressful. The three-day rule is the biggest change to mortgage closings — borrowers need to receive their loan estimate three days after an application is signed. In turn, this means that they must receive their closing documents three days before settlement. If significant changes are made to the closing document, the lender will need to revise the closing document and the closing will have to be delayed by three days. All of this is being done to better consolidate closing documents so buyers aren’t surprised by last minute fees, and so both the seller and buyer have easier documents to digest.
2. Repair disputes are the biggest source of closing delays. Some sellers will post their house for sale after having an inspector look it over, and if any major issues crop up, the house would be posted in an “as-is” condition. However, when you are about to close on a house and are having it inspected, make sure to note in your agreement to buy that there is room to fix any major issues. Doing so will make it so you get the house in the condition you were promised. Creating a timeline will also be helpful if lots of repairs are needed, and if you work with the seller you can have these completed before your closing date, and adjust that date accordingly if needed.
3. Whoever is working with you to close, try to get a “preliminary title report” to review early on. If reviewed early on, you will avert a possibly long delay due to title defects. This is especially important if you suspect there might be a possibility of a prior lien, estate or divorce problem that could affect your title to the property you want to sell.
4. If you are receiving a mortgage to help finance the property., try to get your documents (bank statements, pay stubs, tax returns), as soon as possible. If you are unsure if you have all the documents needed, ask your bank for a mortgage loan checklist. Getting pre-approved for a loan is also incredibly valuable since it will allow you to better understand what type of house you can buy/afford (which will make your final loan process go much faster). If you work with an experienced mortgage lender, you can ask them to better give you an estimate of how long it will take to process your loan; keeping setbacks in mind here, along with the lender’s estimates, will be helpful in keeping your closing going smooth. Above all, make sure you contact your lender the day before, and the day of closing, since most are notorious for wanting information (like a recent bank statement) at the last minute.
Most importantly, you’ll want to be as involved in the process as possible so that you can stay in control of your closing.