Now that you have found your dream home, gotten approved for a mortgage loan, and made an offer to purchase that was accepted, it is time for the closing. MSN Real Estate has shared with us these six valuable tips for a painless closing:
1. Ask questions
Knowing what to expect and communicating with all parties involved in the deal are key to a successful closing, says Neil Garfinkel, a real-estate attorney at Abrams Garfinkel Margolis Bergson LLP in New York.
2. Anticipate human error
Richardson says he recently represented a buyer whose closing failed because of missing loan documents. The buyer was a co-signer on his brother’s mortgage, and the lender had requested 12 canceled checks showing that the brother, not the buyer, was paying the old mortgage. The buyer could come up with only eight checks, and the loan officer said that would be enough. That was weeks before closing.
“I kept saying that wasn’t going to work,” says Richardson, who also has worked as a mortgage broker. “The requirement is 12 checks. How can eight checks be sufficient?”
Three days before closing, the lender said it couldn’t issue the loan without the 12 checks, and the deal was canceled.
3. Review loan documents in advance
One way to ensure all is going as planned is to tell the lender that you want to review the documents before closing, or ask your attorney to do so.
By law, you have the right to review the closing-settlement statement, or the HUD-1 form, at least 24 hours before closing. Compare that form to the good-faith estimate you received when you applied for the loan.
4. Take a check
Another reason to review the loan documents in advance is so you know how much money you must bring to closing. And yes, you will need a check at closing, most likely a certified one.
5. Take the day off
A smooth closing may take less than 30 minutes, but you won’t know for sure if your closing will go as planned until it’s done.
6. Expect the unexpected — including typos
You’re at the closing table. You’re told everything is good to go. All you need to do is sign.
You must double-check the numbers on the mortgage note you are signing, even if you have received the HUD-1 form before closing.
“One of the biggest holdups in closing is when the mortgage documents are incorrect,” Castellanos says. “Sometimes, you have to correct the interest rate, or the amount is wrong and you need to fix it.”
Because of a simple typo, your loan documents may need to be sent back to the lender to be redone.
To prepare for these unexpected delays, borrowers should try to schedule their closings for earlier in the day. And don’t wait until the last day on the contract to close.
Read the entire article here.