Jump up & down and breathe a quick sigh of relief, you’ve just accomplished one of the most important steps of the process! But the journey is not over yet, so what can you expect between the contract and closing?
Lender requests – Now that you have a ratified contract, the clock is ticking on your financing contingency and final loan approval. Getting your lender all the requested documentation as soon as possible is extremely important!
HOA docs – If there is a homeowners association in the community, the seller must provide the governing documents to you, at which point you have 3 days to review and approve.
Home inspection – If there is a home inspection contingency, the contingency period typically lasts anywhere from 7-10 days, so the inspection is performed within a few days to a week of contract ratification. You will also need to negotiate any repairs with the seller during this time.
Radon inspection – If there is a radon contingency, its timeframe typically mirrors the home inspection timing. If radon is detected, you may negotiate with the seller to have it remedied.
Termite inspection – A termite inspection will be done within 30 days of closing. If termites or pests are found, the sellers may be responsible for treatment.
Homeowners insurance – Obtaining homeowners insurance is a requirement of final loan approval and can be done through any major insurance provider. Check out this helpful guide from ConsumersAdvocate.
Appraisal – An appraisal is typically done even if there is no appraisal contingency. If there is a contingency, it typically lasts anywhere from 14-21 days. The lender will usually order the appraisal once the home inspection has been done. An appraiser will visit the home and determine its value based on a number of different factors. If the appraisal comes in at or above the contract price you may move forward. If it comes in below the contract price, you may be responsible for making up the difference in order to move forward.
Financing – Once all the final documentation has been received, the appraisal has been done and the loan has been underwritten, the lender will issue a commitment letter confirming that the exact loan amount will be funded. If there is a financing contingency in place, it typically lasts around 21 days.
Utilities – You will need to set up utilities and services (electric, water, trash, etc.) to begin in your name on the day of closing.
Review the HUD – A Closing Disclosure will be sent to you by your agent and/or the title company a few days before closing. This itemizes what you can expect to pay at closing. Ask your agent to review the CD with you if you have any questions.
Wire funds – You will need to wire adequate funds to the title company at least 1-2 business days before closing.
Walk through – A walk-through of the home will be done the day before or day of settlement. You will want to be sure you know how everything in the home works, that any home inspection items have been completed, and that the home is in substantially the same condition as it was at the home inspection.
Closing – Closing is typically held at the title company’s office. You will need to bring a photo ID and your checkbook. You will select a title insurance policy and sign all the necessary documentation associated with your loan and the property. You should expect confirmation that the deed has been recorded within 1-2 business days of closing.
Posted on April 4, 2014 at 9:17 am by Palmer Harned