Closing on your new home is stressful even for real estate veterans, but for first timers it can really be a ride through the funhouse. There are five things that will make a stressful situation into a nightmare if you’re not careful, and some of them can come back to really take a bite out of you.
- The biggest mistake you could make is to sign something that you don’t understand and was not in the documents that you were given to review. If you can’t understand the documents or the terms seem to have been changed from what was previously agreed upon, you need to ask your lender, realtor or perhaps seek advice from an attorney. For instance, if you were offered a 30 year fixed rate mortgage at X percent, but seem to be signing a 25 year adjustable rate mortgage, you need to hit the brakes and find out what’s going on here.
- Thinking that just because you are preapproved, you have the mortgage. The worst thing you can do after you are approved is to think you’re in the clear. Changing your job, buying a new car, or going on a credit card fueled spending spree might make your lender wonder how you’re going to meet the mortgage payments with all these extra expenditures.
- Not covering your closing costs in advance. Buyers and sellers alike have costs to meet at closing, so both parties need to be sure that they have everything in place. Buyers will need to have deed recording fees, surveys, taxes and fees for notes and mortgages, appraisal fees, inspection fees, attorney fees, and other expenses. Sellers are looking at fees to cure title, realtor’s commission, HOA estoppel letter and fees, title search fees, and (depending on the county) title insurance fees – these should be covered by wire transfer or bank-issued cashier’s check.
- Not getting your closing documents three days in advance of closing. You will want to receive and review these documents, make sure they are in order, and possibly review them with your lender, and real estate agent.
- Wiring your money to someone other than the title company. We’ve covered this before, but we can’t emphasize it enough. There are scammers who may have already hacked your email, your realtor’s email, the seller’s email, or compromised the email of another party. You’ll get an email from someone you think is the real party telling you to make the wire transfer for your closing costs to a different account, sometimes in another state, or to another country. UNDER NO CIRCUMSTANCES SHOULD YOU DO THIS. Call the number on your paperwork and ask to speak with the person handling your closing and ask if this is in fact the account that your money is supposed to go.
There. Now you have a roadmap to total disaster. Steer clear of these hazards, make use of the resource links, and you closing will go smoothly. In no time at all, you will have the keys to your new home.