You’re getting ready to purchase that home you found in the perfect neighborhood. But what happens between the time your offer gets approved and the keys are handed to you? If you have never purchased a home, the home loan closing process may seem like a bit of a mystery and an overwhelming number of steps to complete. We’re here to walk you through the process so you know what to expect and are prepared for what’s to come next.
As you’re beginning the purchase process, make sure you have a clear idea of the associated costs so you aren’t caught off guard at the end. APM has tools and resources that can help you estimate your closing costs. After you have prepared for the costs, chosen your home, had your purchase offer accepted, applied for your home loan, supplied all necessary paperwork, and met initial loan conditions through underwriting, then the home closing process begins.
The Home Loan Closing Process
The following steps will take place as you finish out the last two to three weeks of closing your home loan:
The home inspection is important so that you have a chance to get anything fixed or addressed by the sellers if needed, but also is helpful for the lender in case something isn’t up to code or the roof isn’t new. Underwriters may ask for certain repairs or certifications and it will be up to you and your real estate professional to work out those details and costs with the seller.
An appraisal of the home is required for the lender. A qualified appraiser will inspect the home, create a report, and determine the fair market value of the home. Since the home loan is based on your purchase price, the appraisal value needs to be at or above that price.
Proof of homeowners insurance will be required for the new loan, so you will need to decide what insurance company you will use and put them in contact with the lender.
Once initial approval of your home loan happens, a closing date will be set. That is the date that the papers will be signed and the loan settlement will happen. Don’t be surprised if this date changes several times as the paperwork is being processed.
Once the closing date is set, a Closing Disclosure will be sent to you detailing all of the loan information as well as exactly what the costs are and how much money you will need to provide at the settlement.
Your final closing costs will be detailed on the Closing Disclosure. You will need to bring that amount in the form of a cashier’s check to the closing appointment.
Home Walk Through
As the home loan closing process nears the end, you will have a final home walk through to make sure the home is still in the same condition and to address any last-minute issues if needed before the loan and purchase is final.
You will set an appointment with the Title Company to sign all final paperwork and provide the closing costs. You will need to bring all requested documentation, your photo ID, and the closing costs with you to the appointment. Be sure to carefully look over all paperwork that you sign and ask questions about anything you don’t fully understand.
After the signing, you will wait for the loan to be funded. This usually occurs within 24 hours of closing for a home purchase. Once everything is funded, then you get your keys! Time to start moving!
American Pacific Mortgage wants to help make the home loan closing process go as smoothly as possible. Knowing what to expect during the process helps remove stress and gives you confidence to make your dream home purchase. Contact one of our loan advisors today to help you take that first step in your homeownership journey!