POST TAGSPurchase First-Time Home Buyer Loan Process
Blog posted On October 07, 2021
Closing on a home is an exciting start to a new future, and it’s a huge accomplishment. If you’re about to close on a home of your own – congrats! We’re sure you can’t wait to move in and start enjoying life as a homeowner. Before you do, there are a few important steps of the closing process left.
When you close on your home, you will need to bring with you certified checks for your down payment and closing costs. Though there are ways to roll your closing costs into your loan amount, you will then have to pay interest on them. Closing costs can include:
Typically, closing costs are between 2% and 5% of your loan amount. So if you have a loan of $350,000, you will pay between $7,000 and $24,500 in closing costs. Down payments can vary more. In 2020, the average down payment for first time buyers was around 7%. For repeat buyers the average down payment was 16%.
Anything that could greatly affect your financial situation should be avoided. If you make any last-minute changes before closing on your home like changing jobs, your lender will have to verify your new employer, which could push your closing back further than expected, or lose your loan approval altogether. You should also try to avoid making any large deposits or opening a new line of credit. These will cause your lender or credit card company to review your information again.
It’s common to take one last walkthrough of the house with your real estate agent before you sign the final documents. This can ensure that the house is in order and everything that needed to be fixed or updated got the necessary changes. Once you sign the final closing documents, there’s no going back.
Closing requirements vary per state (and sometimes county), but there are certain parties who should be present at closing in almost any state:
You will receive a lot of documents at your closing that you will need to double check for accuracy:
Once you have insured that all your paperwork is correct, you can start to sign. There are three main documents that you will sign at closing. The first is the deed of trust, the second is your mortgage note, and the third is your closing disclosure.
After you’re finished at the closing table, it’s time to celebrate! Even after you’re finished signing on the dotted line, we are always here to help. If you ever have any questions before during or after closing, let us know.
Sources: Bankrate, NerdWallet