Wednesday, August 26, 2009
How to buy a house in 25 easy steps - Part the last
You've picked out your title company, insurance company and you've stayed on top of the process. Now what?
21. Schedule your closing. Eeeek, we're getting close now (no pun intended). Your contract will specify a closing date. If you don't close by that date, technically the contract is void. Nobody wants that (usually). Try to get your closing scheduled for at least 2-3 days before then. If anything unforeseen comes up, you'll hopefully have time to get it resolved before you have a stroke.
22. Decide whether you want title insurance. I mentioned before that your lender will require a mortgage holder's policy. That benefits them alone. If you want any assurance that no one is going to come back and say that they inherited your house 30 years ago and never sold it to those crazy people that moved in later (you know, the ones you bought it from), you are going to want an owner's title policy. The first policy is the one that costs the most, the second one (yours) is available for a fairly nominal cost. Do yourself a favor and buy title insurance.
23. Review the settlement statement, also known as the HUD-1. This is a standard government issued form, so no matter where you live, it will look the same. Go over it with your Realtor to make sure that anything the seller agreed to pay is being charged to them and that your earnest money has been correctly credited. Also make sure that your lender closing costs are the same as what you agreed to when you first applied for the loan. If there are any changes needed be sure to contact your lender and the title company to get things corrected. Lastly, look at the last line on the left hand side of the first page. It will tell you the cash due at closing down to the penny. You will need certified funds in that exact amount made out to the title company. In some cases, the lender or seller may require you to wire the funds that day.
24. Do your final walk through. You'll go back to the house with your Realtor 1-2 days before closing. The purpose of this visit is just to make sure that nothing significant has changed with the condition of the property since you made the offer. You know, like trees falling through the roof, chandeliers taken down, holes in walls, things like that.
25. Show up for the closing, cashier's check and driver's license in hand, ready to sign away your first born. You may want to do a trial run by signing your name just as it appears on the contract about 422 times, just for practice. And don't pass out when you see the sheet that shows the total amount you are going to pay over the course of the next 30 years. Fair warning - it isn't pretty.
Congratulations! You are now the proud owner of your very own home. No one can tell you that you can't paint it purple*, no one is going to raise your rent every year**, no one can tell you that you aren't a grown up now***. You've done it!
*Unless your homeowner's association or local historical district says so
**Unless you got an adjustable rate mortgage - don't do it
***Except your mom
Shout out to Julie - thanks for lending me the picture of your house. I won’t tell people that I made it look even purpler if you won’t.