Keep calm as you prepare for closing
While the prospect of buying a new home can be heady, even thrilling, many of the tasks involved are quite tedious. Getting your financial ducks in a row, gathering documents to provide to the lender and responding to their every inquiry can make you feel like you’re jumping through hoops. The process can feel exhausting.
Consequently, when it’s time to close on your home and loan, it’s only natural to feel a rush of excitement. You’ve passed the preflight inspection, you’ve been cleared by air traffic control and now you’re ready for takeoff.
Industry experts advise keeping at least one foot — or wheel — on the ground, however. Maintaining an
attitude of calm deliberation will stand you in better stead. Resist the urge to take impulsive actions in the weeks, or even days, leading up to closing. Sudden, unexpected changes, especially those that affect your financial profile, can derail the process.
“The most important thing ... when you’re preparing to close is don’t quit your job, don’t move your money and don’t go buy anything big,” says Christiana Tran, mortgage planning consultant at Pacific Western Mortgage Group in Emeryville. “Don’t go out and buy a car, don’t go get a credit card.” Why?
It’s about “not throwing wrenches into the process,” Tran explains. “Just because the bank is ready to fund the loan or is planning to fund the loan, until the money is in the right account, it has not happened. They will still do one last verification for things, and you never know. So until your keys are in your hand, and you’re standing in your property, don’t do any major financial changes.”
Read the documents
You are entitled to review the closing documents before you meet to sign them.
“You can request a copy of your documents from the escrow officer ahead of time,” Tran notes.
Why is it a good idea to read the papers in advance? For one thing, you’ll know exactly what it is you’ll be signing before you get to the closing table. Secondly, if there’s anything you don’t understand, you’ll have a chance to prepare your questions in advance.
“You can read through them and highlight them,” offers Tran. First-time buyers especially, “are going to have a lot of questions that will be answered when (they) sit down.”
Get owner’s title insurance
“You always, as an owner, always want title insurance,” Tran warns. “I don’t care if you build (your home) yourself.”
The state of California makes owner’s title insurance optional, but Tran recommends seeing it as mandatory.
“If you get owner’s title insurance, it follows the owner no matter what,” she declares. If there’s a defect in the title of any kind, the title insurance company will either repair the defect or pay any losses that result from it, she reports. Owner’s title insurance typically runs from $1,000 to $1,800, according to Tran, and is “well worth it for a lifetime of protection.”
Closing on your home is the final step before moving. Erring on the side of caution in your actions and attitude can help ensure a glitch-free process.