In preparation for closing on your new home, there are several things that you need to do to ensure the big day goes off without a hitch. Unfortunately, some buyers believe that after the offer is accepted, they just have to wait until closing. In actuality, lenders and sellers often have several things that the buyer must have done in order for the sell to complete. If you have a closing date approaching, here are some things to do in preparation.
Be Vigilant About Your Household Income
Whether or not you realize it, there is still a chance that your home loan could be denied by the lender. If any major changes to your income and credit history occur, the lender could decide that you are no longer qualified to receive assistance. At that point, you could be left to find a new lender before the closing date.
To ensure that you do not run into any problems on closing, be careful with your finances and any factors that could influence your income. For instance, do not quit your job, take out any new credit lines, or transfer any funds from your bank account.
Get a House Inspection
Even if your home is a new build, it is important that you get an inspection. It is likely that your purchase contract with the seller contains a contingency that allows you to back out of purchasing the home if the inspector's report indicates that the home has significant repairs needed.
If you fail to have the home inspected and complete the purchase of the home, you could be on the hook for any repairs that are needed later. If you decide to go after the previous owner for the cost of the repairs, you could run into legal obstacles that would prevent you from collecting funds.
Buy Homeowners Insurance
The idea of buying homeowners insurance before you actually become the owner might sound ludicrous, but many lenders require that this is done before closing date. Your lender could require you to prepay for your coverage for a certain period of time, such as a few months or a year. Without the coverage in place, your closing could be delayed.
You can choose a cash value or replacement-cost policy. A cash value policy offers compensation for the depreciated value of your possessions when you file a claim. By contrast, a replacement-cost policy pays the current price to replace your possessions. Work with an experienced agent to determine which policy would be best for your home.