How to Avoid a ‘Scary’ Situation at Closing

Spooky surprises might be fun at Halloween, but they’re not something you want to experience at closing. Fortunately, there are many things you can do in advance to prepare for a smooth settlement. Here are a few.

  1. Make sure you have enough cash to close. Your mortgage lender can tell you exactly how much you need. If you plan to use money that was gifted to you, make sure it’s documented properly. And don’t forget to ask the title company in advance how funds may be delivered.
  2. Avoid changing jobs if possible. Two of the criteria lenders review during the approval process are your employment status and current income. Changing jobs before you close on the sale of your new home may impact your loan terms or delay settlement. If a change in employment is unavoidable, let your lender know right away to minimize the impact it may have on the process.
  3. Postpone major purchases until after settlement if you can. In addition to your employment status and income, lenders review your assets, credit history and debt-to-income ratio. Buying a big-ticket item that impacts any of these factors may affect the status of your loan. If you can’t delay the purchase, let your lender know before you buy it. They can help you understand the impact it may have on your loan.
  4. Shop for homeowner’s insurance at least a few weeks before settlement. And consider looking into a few different insurance carriers. That way if one company is unable to provide coverage, you have time to get a policy with a different carrier before settlement.
  5. Consider title insurance. While certain aspects of title insurance may be optional, it’s important to understand how this coverage safeguards you when you buy a house. It protects your ownership rights on the property if someone sues you for something that happened before you bought your home.

If you’re getting ready to close on your property and have questions about what you need to do to help ensure a smooth settlement, contact us today to get the answers you need.