So, you’ve picked out your first luxury home, and your offer has been approved. If you’re waiting for the deal to close, you may not be sure what you need to do before you can get the keys to your new home. Closing on the house is the last step of the real estate transaction.
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You’ll be given a closing date during negotiations, and it could be as many as 50 days after the offer is accepted. Once the deal closes, the property ownership will be transferred to you. However, to ensure a successful closing without delays, you will need to take certain steps.
Closing on a House: How to Prepare for Closing Day
There are various factors that can affect how long it takes to close on a house. Make sure they’re all covered, and you’ll find yourself in your new home sooner rather than later.
Keep Your Credit and Debts in Check
One of the biggest mistakes you can make while in the closing process is to take on new debt. Lenders are required to track changes in a borrower’s credit from the initial application all the way through the closing.
Any significant change in credit could significantly delay your closing or, in some cases, even result in a denial from the mortgage company. Not only should you refrain from opening new accounts, but you also shouldn’t increase your current credit cards’ balances lest your debt-to-income ratio becomes too high.
Have All Documentation in Order
Once closing day has arrived, you’ll need to bring several documents. These include:
- Identification: The closing agent will need to verify you are the new owner of the luxury property.
- Funds: Bring a certified or cashier’s check to cover the down payment and closing costs.
- Proof of insurance: Your home insurance should be in effect on closing day. You will need the insurance document as well as a receipt that shows the policy has been paid for the next year.
- Final contract: It’s a good idea to bring this along just in case there are any questions about closing costs or any other details.
You may need other documents as well. The types of documents required vary depending on the type of property, the terms of the purchase contract, the terms of the loan, and the state and local estate rules and customs. Check with your real estate agent to ensure you have everything you need.
Expect the Unexpected
What should you expect when closing on a house? Well, it isn’t always always smooth. Something unexpected could delay the process, so it’s important to do everything you can to avoid unnecessary mishaps.
For example, the most common reason for a delayed closing is the time it takes to get a loan approved.
You can help avoid this by getting a preapproval from a lender before making an offer. Errors in your documents could also delay your closing, so you should review them thoroughly for accuracy. Additionally, the home inspection could slow down the process if it’s determined many repairs are needed. Work with the seller to get the repairs completed quickly or negotiate a lower price so that you can cover the repairs yourself.
Closing on a house will take time, but there are things you can do to speed up the process. Following these tips will ensure that you’ll receive the keys to your new luxury home when expected and have a successful closing day.