Chapter 5 Closing the Deal The Homebuyer’s Guide Chapter 5 Closing the Deal

What Happens in the Escrow Process? (Period from when offer is accepted through loan closing) Loan application Appraisal Survey Inspections Insurance The Homebuyer’s Guide

Preparing for Closing Setting the Date Meeting with the Lender Conducting a Title Search Informing the Utility Companies Purchasing Homeowners Insurance

Cost of Insurance: External Factors Geographic loss experience Type of construction Type of fire protection House size Type of contents Condition of the house Your credit score The Homebuyer’s Guide

Cost of Insurance: Your Influence Type of policy Size of deductible Optional coverages Discounts The company you choose (Another opportunity to use the ‘Rule of 3’) The Homebuyer’s Guide

Different Types of Insurance Hazard or homeowners insurance Flood or special hazard Mortgage insurance Title insurance Mortgage life insurance Home warranty policy The Homebuyer’s Guide

Preparing for Closing Do a final walk-through inspection Get a copy of the HUD-1 settlement statement Get a cashier’s check Sign the mortgage papers Call the utility companies The Homebuyer’s Guide

A Final Walkthrough Inspect your home just prior to closing to be certain it is in the same condition that it was when you made an offer on the home. Find and label the following: Main cutoff’s for water and gas Emergency switch on the furnace Switches for the main electric panel Fuse or circuit breaker box Manuals for the furnace, water heater and appliances

Questions to Ask the Seller What is the history of the home? Are there wiring diagrams or blueprints? Are any appliances or repairs under warranty? Who provides water and sewer? What other services are available? Who are the current providers for trash, internet for the home?

More Questions to ask the Seller Are there any historical pictures of the home? What seasonal maintenance has been done? Who has worked on the house? Is there extra (matching) paint available? Are there any window screens, vents or coverings that come with the home?

Closing Documents Truth in Lending statement HUD-1 settlement statement Mortgage note Mortgage or deed of trust Affidavits The Title The Homebuyer’s Guide

Costs Associated with Closing Application fee Appraisal fee Loan origination fee Transfer and recording taxes Title Insurance Adjustments The Homebuyer’s Guide

Types of Ownership: Who and how will you own your home? Sole and separate: single person Joint tenancy: equal, undivided shares, often with rights of survivorship. Joint Tenancy with right of survivorship is available only to married couples. Tenancy in common: property is owned jointly, but if one owner dies, the deceased owner’s share goes to his or her heirs rather than the surviving owner. The Homebuyer’s Guide

Summary Review the HUD-1 Settlement Statement and the Costs Associated with your closing. Look for earnest money, adjustments and escrow on the closing documents. Decide on the Legal Ownership of the Home, Who File all closing documents in a safe place in your new home for reference or questions The Homebuyer’s Guide