Purchasing a new home, whether it is your starter home, an upgrade to a larger home or a downsize to a smaller home is an exciting time. However, potential homeowners in the Stroudsburg area should not rush through the closing process in an attempt to quickly get the keys to their new residence. The following are some steps potential homeowners should take before closing on a new home.
Contingency clauses
First, many purchase agreements include contingency clauses. These are steps that potential homeowners must take before their home can be closed upon. For example, potential homeowners may have to complete a home inspection, obtain an appraisal or there may be financial contingencies.
Title searches and insurance
Second, potential homeowners may have to complete a title search and obtain title insurance. This ensures that they are legally able to own the home — that is, “take title” to the residence free of legal claims.
Underwriting
Third, potential homeowners may need to have their financing approved before closing. This means their mortgage must go through a process known as “underwriting.” Underwriting ensures that potential homeowners were truthful with regards to the facts their mortgage is based on.
The closing disclosure
A review of one’s closing disclosure may also be necessary. Closing disclosures are also called HUD-1 settlement statements, and they contain the terms of the homeowner’s mortgage payments and closing costs.
A final walk-through
Finally, potential homeowners will want to do a final walk-through of the home within one day of closing. This is to ensure the old owners have indeed vacated the home and it also provides potential homeowners with the opportunity to make sure the home is in the condition that they and the seller agreed upon in their purchase agreement.
This is only a brief overview of some steps potential homeowners may want to take before closing on a new home. There are other steps that may need to be taken. This post does not contain legal advice, so to ensure you have done all that is necessary before closing it can help to seek the advice of a professional. Real estate attorneys may be a useful resource to those who want to make sure the legal aspects of closing on a home are taken care of.
