5 Simple Steps to Closing on a House

You found the perfect home and managed to get your offer accepted. Congratulations!

So what happens now? How do you go from contract to close?

Here are five simple steps to closing on a home.

1.  Get Pre-Approved for Your Mortgage Loan

You probably got pre-approved for your home loan even before you started your house hunt. That is perfect because it allowed you to search in the proper price range. Did you know that you can apply for a property-specific pre-approval as well? This is especially helpful when competing with other buyers for the same home because it shows the seller that you won’t have any trouble qualifying for financing to close that specific deal.

Home loans require a team of professionals running credit checks, reviewing financials, and confirming employment. So you want to start the process of getting a mortgage as soon as the offer on your new home has been accepted.

Applying for your mortgage will require:

• Proof of income
• Confirmation of employment
• Permission to run your credit
• Proof of assets
• Confirmation of debt balances
• Additional docs as necessary to confirm identity, rental history, and creditworthiness

We will NOT require an application fee for your mortgage.

It will take a few weeks for your lender to approve your mortgage application. But there’s plenty to do in the meantime.

2. Complete Your Inspection(s) and Appraisal

The home inspection gives you a detailed report on the home’s condition based on the evaluation of a certified home inspector. This report will list any issues visible on the property (actual and potential issues).

The standard home inspection doesn’t cover specialty features like fireplaces or pools. It also doesn’t cover issues that can’t be seen, including radon, asbestos, pest damage in the walls, or potential problems inside the plumbing system. But you can hire specialists to inspect these additional items if you have any concerns.

The appraisal confirms the house’s value to make sure that the property is worth the amount you’re paying for it. This is especially important if you’re making a low down payment because your lender will need assurance of the property’s value if they are loaning a large percentage of its value.

3. Renegotiate Terms if Necessary and Order Homeowner’s Insurance

Sometimes the home inspection will uncover more issues than either party expected. In this case, you might decide to renegotiate the contract terms to have the seller address some of the problems. You might ask the seller to repair or replace defective items, to give you credit at closing so you’ll have the money to complete the repairs, or to lower the purchase price to offset the costs of repairs.

With the renegotiations complete, you can order your homeowner’s insurance policy. Your lender will need to confirm that the home is insured before they can close on the loan.

4. Get Clear-to-Close

Your lender has been doing lots of work behind the scenes, and they now have your loan docs ready to sign. Your loan docs outline every detail of your home loan to make sure you understand exactly how your mortgage works, how much you’ll pay each month, and how much you’ll pay over the loan term.

5. Signing Day

You’re in the home stretch! Only a few essential tasks remain. On signing day, you just need to make sure:

• To sign your closing docs with a notary,
• Wire the remainder of your down payment and closing costs,
• And pick up your keys!

What happens if the house doesn’t close by the closing date?

Sometimes the closing gets delayed due to unexpected issues with funding, required repairs, or questions about ownership claims (called clouds on title). All the professionals working on your deal want it to close on time so that there’s no issue with scheduling movers or recalculating closing costs. But if a delay is unavoidable, rescheduling the closing day is manageable.

Get Pre-Approved for Your Home Loan Today!

As an OVM customer, you have direct access to mortgage experts who understand what it takes to close on a home as scheduled. Call us directly at 757-296-2148 or start your loan application online at ovmfinancial.com/QuickStart.