If you are first-time home buyer, chances are, you could be or might be one of those home buyers who face a lot of challenges at the settlement. Of course, you don't want to undergo the stress and pressure associated with the process. Heck! No way! You know that there is definitely some ways to ease up the journey of home ownership. Yes, there are. So get a cup of coffee as you read on below.
Here are the seven steps that you can follow to make the settlement process as smooth as possible:
1. Know all the players and the process. At the settlement, the buyer, the seller, brokers for both parties, and the title company representative (or a lawyer) meet to review the details of a property sales agreement before final signatures. All the provisions of the agreement will be explained one last time.
First, clear up any unresolved matters with the property. Resolve any problems with the property's title not corrected during the walk-through. Also, obtain the title insurance. Next, the attorney or title representative will explain the Deed of Trust, the mortgage note, lender instruction forms, and the transaction settlement sheet to the buyer. The buyer signs all these documents and the balance of the downpayment is paid to the seller with a certified check.
The closing costs and settlement fees are also explained. They include loan origination fees, recording fees, county taxes, attorneys' fees, and appraisal fees. The buyer may have to pay some of these fees at the closing. Closing costs are roughly 4% to 7% of the total loan. Any reimbursed fees for taxes or insurance that may have been paid in advance are returned to the proper parties as well. The seller and the brokers are supplied a copy of the settlement sheets for their records. The house keys are then passed to the owner.
2. Obtain closing documents in advance. It is best that the buyer gain access to the loan documents to review before the settlement. Ask the mortgage lender representing you at the closing to obtain the documents for you in advance. Reviewing such documents in advance can help you solve problems that could jeopardize the agreement.
3. Understand the provisions of the programs you participate in. There are a variety of first-time home buyer programs, so it is up to you to understand what you are entitled to or what you are responsible for providing if you participate. Make sure whoever is doing your paperwork is familiar with the program you're in so that hey get all the proper forms and they know everything they are supposed to turn in.
4. Know how much money to bring to the meeting. This sounds like a very simple matter, but if you can't meet the financial obligations in your loan agreement, the sale may not go through. Find out in advance how much money you'll need to bring with you, and who the checks made payable to. Fees for the title insurance company or inspections are common. Normally, the realtor would help you do all that kind of processing up front.
5. Make sure all the documents are fully executed. Inaccurate or missing information on important documents can delay your purchase. Develop a checklist to keep track of forms that need to be completed so that everything is in place at the closing. Whenever you do anything, like turn in forms, check it off the checklist and follow up to make sure the papers were received. Everything that the bank sends you, send back as soon as possible. Also, go back and double-check with your loan processor or agent to make sure that they have everything so that your process runs smoothly and you stay on schedule. Remember that it is the responsibility of the buyer to make sure that the title company has gotten all necessary and all documents are recorded properly at the courthouse. That house isn't really yours until those documents are recorded at the courthouse.
6. Don't panic over errors. The calculation of the closing costs usually generates most of the headaches and misery. Pay attention to the estimate a broker brings to you, note down the closing costs and how much money they're really borrowing.
7. Take time tounderstand before signing. You should never sign anything that you don't understand, so don't feel pressured if problems arise at the closing. Take your time. Read carefully the documents. If you have questions, like there's a term you are not familiar with, ask for an explanation. Don't be afraid to speak up because you are going to be responsible for whatever you sign. There's no turning back once those papers are signed.
Here are the seven steps that you can follow to make the settlement process as smooth as possible:
1. Know all the players and the process. At the settlement, the buyer, the seller, brokers for both parties, and the title company representative (or a lawyer) meet to review the details of a property sales agreement before final signatures. All the provisions of the agreement will be explained one last time.
First, clear up any unresolved matters with the property. Resolve any problems with the property's title not corrected during the walk-through. Also, obtain the title insurance. Next, the attorney or title representative will explain the Deed of Trust, the mortgage note, lender instruction forms, and the transaction settlement sheet to the buyer. The buyer signs all these documents and the balance of the downpayment is paid to the seller with a certified check.
The closing costs and settlement fees are also explained. They include loan origination fees, recording fees, county taxes, attorneys' fees, and appraisal fees. The buyer may have to pay some of these fees at the closing. Closing costs are roughly 4% to 7% of the total loan. Any reimbursed fees for taxes or insurance that may have been paid in advance are returned to the proper parties as well. The seller and the brokers are supplied a copy of the settlement sheets for their records. The house keys are then passed to the owner.
2. Obtain closing documents in advance. It is best that the buyer gain access to the loan documents to review before the settlement. Ask the mortgage lender representing you at the closing to obtain the documents for you in advance. Reviewing such documents in advance can help you solve problems that could jeopardize the agreement.
3. Understand the provisions of the programs you participate in. There are a variety of first-time home buyer programs, so it is up to you to understand what you are entitled to or what you are responsible for providing if you participate. Make sure whoever is doing your paperwork is familiar with the program you're in so that hey get all the proper forms and they know everything they are supposed to turn in.
4. Know how much money to bring to the meeting. This sounds like a very simple matter, but if you can't meet the financial obligations in your loan agreement, the sale may not go through. Find out in advance how much money you'll need to bring with you, and who the checks made payable to. Fees for the title insurance company or inspections are common. Normally, the realtor would help you do all that kind of processing up front.
5. Make sure all the documents are fully executed. Inaccurate or missing information on important documents can delay your purchase. Develop a checklist to keep track of forms that need to be completed so that everything is in place at the closing. Whenever you do anything, like turn in forms, check it off the checklist and follow up to make sure the papers were received. Everything that the bank sends you, send back as soon as possible. Also, go back and double-check with your loan processor or agent to make sure that they have everything so that your process runs smoothly and you stay on schedule. Remember that it is the responsibility of the buyer to make sure that the title company has gotten all necessary and all documents are recorded properly at the courthouse. That house isn't really yours until those documents are recorded at the courthouse.
6. Don't panic over errors. The calculation of the closing costs usually generates most of the headaches and misery. Pay attention to the estimate a broker brings to you, note down the closing costs and how much money they're really borrowing.
7. Take time tounderstand before signing. You should never sign anything that you don't understand, so don't feel pressured if problems arise at the closing. Take your time. Read carefully the documents. If you have questions, like there's a term you are not familiar with, ask for an explanation. Don't be afraid to speak up because you are going to be responsible for whatever you sign. There's no turning back once those papers are signed.
