In the US, 65.8% of Americans are homeowners. Have you decided to hang up your hat as a renter and want to join the crowd? Then this must be an exciting time for you!
Perhaps you have your eye on a property or two and you want to proceed with purchasing one.
How do you close on a house and ensure that you’re successful? What else do you need to do to get those house keys in your hand?
Read on to find out!
What Is Closing on a House?
First of all, what exactly is closing on a house? Knowing this term will be beneficial since it’s definitely one you’ll come across when buying a home.
Basically, this is the end part of the purchase process. Your mortgage will go through, ownership of the property will transfer to you, and you’ll get the keys!
You can actually put down your preferred closing date when you put in your offer for a house. This is usually at least 30 days in advance. But do note that this is a preferred date, which means it’s very likely that you won’t get the one you want.
Instead, the closing date will depend on your mortgage lender, considering you can’t purchase the house until your mortgage goes through. So it’s in your best interest to speak to a lender and arrange for everything well ahead of time.
How Quickly Can You Close on a House?
For some people, the time to close on a house is about 6 to 7 weeks. However, most take about 30 to 45 days. Either way, as you can see, it’s a very lengthy process.
Do note that if you’re buying in cash, this time period can be drastically shortened to just a few weeks. Remember how the closing time depends on your mortgage lender? Well, if you eliminate the mortgage, then you don’t need to wait for as long.
What You Can Do to Speed up the Process
Of course, your lender’s actions are out of your hands. But there are some things you can do to speed up the process while you’re waiting. Below are some things you can do to help things along.
Get a Home Inspection
You should know that home inspections are not required to purchase a house. However, it’s in your best interest to get one because you want to make sure you’re getting your money’s worth, after all.
By ordering a home inspection, you can make sure there aren’t any defects you might discover after you have closed on a house. If this happens, then you’ll be financially responsible for fixing these things.
Not only should you get a home inspection, you should try to be present for it as well. That way, they can explain everything to you in person.
Get Homeowner’s Insurance
Before a mortgage lender will let you close on a house, they’ll want to see that you have homeowner’s insurance. If you haven’t already applied, you should do so ASAP.
Without an active policy, the lender won’t let you close. So you’ll delay closing if you’re still scrambling to get homeowner’s insurance when everything’s ready to go.
How Do You Close on a House?
To close on a house, you’ll start with setting a closing date, as we mentioned above. You can also get a home inspection and definitely apply for homeowner’s insurance.
But what else do you need to do to close on a house? Find out below.
Open an Escrow Account
An escrow account is where you put your earnest money. It’s then handled by a neutral third party (an escrow company) who can help you disburse the money at the right time.
Your earnest money can go toward things like the down payment, taxes, or closing costs.
Perform a Title Search
Either your attorney or a title company can do this for you. A title search is vital because you make sure that no other person has possible claims to the property you’re buying. It also checks for judgments like tax liens.
This step will give you peace of mind that the home you’re buying is clear of all claims and liens. In fact, you’re not allowed to buy a property that has any of those things.
Get a House Appraisal
Almost all purchases require an appraisal. Before your lender approves your mortgage, they’ll order one.
A house appraisal will tell the mortgage lender not only how much the property’s worth, but also if there are any necessary repairs needed.
Do a Final Walkthrough
Right before you have your closing appointment, you’ll do a final walkthrough of the property. We highly suggest doing it with your real estate agent since they have sharp eyes.
This is the chance to see if the home is still in the same condition as when you opened a contract. This is also an opportunity to check that all repairs have been made, if you negotiated for them.
Have Your Closing Appointment
On the day of closing, make sure you bring all necessary documents. They include:
- Your ID
- Proof of your homeowner’s insurance policy
- Purchase contract
- Mortgage Closing Disclosure form
You can also bring a cashier’s check for the down payment, or you can choose to do a wire transfer beforehand.
You’ll sign all the necessary documents to transfer the home into your ownership. The appointment shouldn’t take more than a few hours.
After that, congratulations! You’re a homeowner!
Become a Homeowner Easily With Our Advice
After reading this article, you now know how to close on a house. While the home buying process can seem daunting, we hope that we’ve help cleared some things up for you so you feel more confident going in.
Keep in mind that getting your dream house on the first try won’t be easy. If it doesn’t happen, don’t be disheartened. Keep trying, and we’re sure you’ll own the perfect home in no time!
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