Going Through Closing

So you have finally graduated to the final step in purchasing your home: the closing.  This is when you will realize the fruit of your efforts.  All the time and energy you put into finding the perfect home and the perfect loan product area bout to pay off.  Hopefully you are entering into this process with a sense of accomplishment instead of a hopeless feeling of "what have I done?" 
 
Final Inspection

Make sure you know what's yours.  You may want to take a copy of the accepted bid with you to your final inspection if you specified certain window dressings or shelving to be included in the sale of the home.  Movers are notorious for snatching everything up and hauling it away, and if you aren't vigilant with what is yours then the sellers may simply shrug their shoulders and pretend as though they didn't remember certain items were included in the deal instead of asking the movers to unpack everything to find the missing items.  Having a copy of the detailed listing will help you in your dealings with the sellers. 

Conversely, you need to realize that all sorts of things get packed up and hauled away that you may not have realized.  Some people move swing sets out of backyards; others will actually dig up certain flowers and take them along to the new house.  If it wasn't specified as a part of the sales arrangement then you cannot throw a fit when you realize the roses you loved so much in the yard are now gone.  If you didn't specify it, then there isn't much you can do about it. 

The previous owners shouldn't wreck the place.  Just because a home is about to change hands does not mean that the previous owners can do anything they want to the house.  That means that they shouldn't have a wild party which destroys the interior of the house the night before handing the keys over to you.  You are purchasing the home based on the way it looked when you came to an open house, and the home should look similar to the condition you originally saw it in.  Truly considerate sellers may have a cleaning service come through after they get the furniture and boxes out, but a quick cleaning by the sellers is sufficient as well. 

If you arrive at the home for the final inspection and the house is in shambles then you do have the legal right to refuse to go through with the closing, although it would probably be better to simply insist that the sellers clean it up before you will sign the documents.  If the final inspection goes on without a hitch but then after you have the keys you see that the home is a real mess then you may want to contact the realtor who represented the sellers…you don't need to simply accept this.

Now is a good time to get ready for changes.  If there are changes that you planned on making to the décor of the home, such as a painting job or new carpet you plan to install, then this is the best time to get it done.  Schedule these projects for before your furniture gets delivered and you will find it much easier to tackle the projects and get them done.  It is always nice to personalize a home with your own personal taste, but it's even better when you can do so without bumping into boxes and furniture while doing so.

Documents, Documents, Documents!

Take this seriously.  You don't want to wander into your closing twenty minutes late, sleep deprived from your "Hooray-I-Just-Bought-A-House" party the night before. This is serious business, and you need to treat it as such.  Don't expect to zoom in, sign a few papers, and then zoom back out.  You are going to sign document upon document upon document until it seems as though you have signed your name so many times that the pen should just automatically sign for you.  You need to remain alert and concentrate on what you're doing.  After all, these documents are all legally binding once they have your signature on them.  This is not the time to mess around.   

Read everything.  It may seem like a huge burden to read everything which is presented to you at closing.  You may feel as though you are wasting everyone's time, and you also may feel a little like the people in the room know you don't know what half the real estate and lending terminology is on the paperwork.  This isn't the time to care what everyone in the room thinks.  You need to make sure that you are not signing something that is contrary to what has already been agreed upon, and it is up to you to spot any mistakes that may show up.  You need to do this because if you sign something without reading it and then later claim you were hoodwinked by the sellers you will have no legal ground to stand on if your only defense is that you didn't take the time to read the document before signing. 

Don't be afraid to ask questions.  The paperwork involved with a mortgage closing can be downright confusing.   All the documents start to look the same and you may wonder why you are signing something that looked just like the last three papers you signed.  Although you can rest assured that each and every document has a specific legal purpose you should also know that you aren't the first person to be confused by mortgage documents.  For this reason, the closing agent and realtor are used to answering all sorts of questions about the pile of paperwork you will be expected to review and sign.  With mortgage documents the only silly question is the one that was never asked.

Your realtor should be there.  If you used a realtor in your search for a home then he or she should be present for your closing.  They can be a great resource when you have questions to ask, and they are also familiar with the initial agreement and will be able to act as a sort of advocate in that sense.  Closing agents are not there to be your advocate, rather they are there to make sure you sign everything and that the proceedings are all legal.  It is always nice to have someone in your corner when you are facing a situation like closing since it has the potential to be a confusing event.

Know how to spot junk fees.  Before you go to closing your lender should have gone over what sort of closing fees you will be expected to pay.  Nobody escapes closing fees entirely because the closing attorney needs to be paid and some states have legal fees, which are unavoidable.  Sometimes, however, lenders see closing as a time when they can tack on a few fees and hope that you will simply think they are par for the course and not question them. Here is the easiest way to spot a junk fee: anything, which has an ambiguous term such as origination fee "or" document preparation fee, is probably a junk fee. 

You should ask your lender about these before going to closing and if their response is something like "that is a standard fee we charge for all our mortgages" then it's a junk fee.  If they can explain the necessity of a fee, such as $12 for a credit report, then that isn't a junk fee, but if they charge $65 for a credit report then that becomes a junk fee since you are being overcharged.  There is nothing wrong with asking your lender point blank how much something cost them.  Did the credit report cost $12 or $65? Were the closing documents over-nighted to the closing agent, thereby justifying the $20 fee, or were they electronically transferred by e-mail, making the $20 fee sheer profit to the lender?

Remember that your lender is going to make plenty of money from you in the years to come as you slowly but surely pay your mortgage loan.  You don't need to feel bad about calling them out on some junk fees.  One more hint regarding junk fees: if you make enough noise about them to your lender and speak to enough managers with the lender then you will eventually reach someone who has the power to remove the junk fees from your closing documents.  Don't believe your mortgage consultant when they tell you that they cannot remove the fees and furthermore their manager wouldn't be able to either.  There is always someone in the company who has the power to do this sort of thing in an attempt at keeping you as a customer.  There is nothing wrong with occasionally playing the part of a squeaky wheel.

The Keys Are Yours

Celebrate! Yes, buying a home is cause for celebration! From start to finish, the process of purchasing a home can be a daunting task, and there is nothing like being able to grab the keys and drive to your home.  There is certainly something liberating about walking through your front door without a thought towards realtors, bids, and financing options.  So now is the time to host a housewarming party or have a few friends over for dinner.  You can give tours of your new home to your friends and family and have a real sense of pride knowing that the walls are your walls, the roof is your roof, and the windows are your windows.  Well…yours and the lender's, of course, but nonetheless you are a homeowner! Celebrate your accomplishment!

Get to know the people around you.  It's not cheesy to take some cookies over to your new neighbors and introduce yourself, in fact most people will be receptive to just about anything which includes baked goods.  You never know when your new neighbors might turn out to share similar interests with you and maybe even become close friends of yours.  You might also want to introduce yourself to the postal carrier so they stop delivering the previous owners' mail to your house.

Yep, you can get a house blessed.  In a few different denominations of beliefs there are rituals or blessings, which can be bestowed upon a home, and for many people this is one of the first things they do with a new home before moving in a stick of furniture.  If this idea appeals to you then you can talk with the priest or pastor of your local church and they will come out to do the blessing.  If you feel at all silly about asking for someone to come bless your house, just realize that some people get their pets blessed, their cars blessed, even sports equipment gets blessed.  Bestowing a blessing upon a home seems a little less silly when you think of it in that way.

You have made it through all the trials and tribulations of finding a home and applying for a mortgage loan.  You have been through closing and have signed your name about a million times.  Now that all that is behind you it is time to stop worrying about those sorts of things, and instead start worrying about taking care of your new home.

Finally, we talk about some of the things you should be aware of as a new homeowner, such as Equity, Upkeep, Payments and Taxes.