Congratulations on finding your new home! As a homebuyer, waiting for your closing day can feel like forever. But the closing process doesn’t have to be stressful – or be a big mystery. Here’s an inside look at how it works and how to avoid any unexpected delays along the way.
As a good rule of thumb, it typically takes about 30-60 days to close on a new home. Keep in mind that timeline can be affected by a variety of different factors, such as:
So what usually happens behind the scenes – and how can you help keep everything on track?
Your lender will call or email you to go over the rate and terms of your loan. Preliminary disclosures will be sent to you via email for your signature. Your tentative monthly payment estimate and closing costs will be included, too, so you don’t have any big surprises!
The appraisal will be ordered for your new home, and if any additional documents are needed, they’ll typically be requested at this time.
Disclosures should be eSigned by all parties, so be sure to review and return these documents to your lender. Your file will also be sent to an underwriter for review.
Now’s the time to start shopping for home insurance, too! Talk with your insurance agent, since insurance will need to be finalized at least 2.5 weeks prior to your closing. If you need a hand, Gate City Insurance Agency will be happy to assist you with comparing rates at no charge, too.
This is traditionally a quiet time, waiting for the underwriter to finish reviewing your file. In other words, no need to do anything until you hear back from your lender!
If you’d like to check something else off your list, it’s a good time to finalize your decision regarding homeowner’s insurance and decide whether you’d like to use automatic payments for your new loan.
After your file is reviewed by the underwriter, some questions or additional requests may come up. Please reply to these requests as quickly as possible, providing any further documents (if needed) within five business days.
You can also expect to receive the appraisal report for your new home during this time.
Your closing date and time will be officially scheduled. Watch your email, since a closing disclosure will be sent to you at least three days prior to closing – giving you a chance to review all of your final numbers.
In addition, bank documents will often be sent 1-2 days prior to closing, which you can eSign prior to arriving at your title company to expedite the process on closing day.
Make sure you have a valid photo ID and your checkbook with you on your closing date.
Your lender will email you the address to the title company, along with confirmation of the closing time, if you’re signing in person. They’ll also go over different options for providing closing costs to your title company.
Of course, closing a home loan involves multiple people and processes beyond your control. But there are some additional simple tips you can follow to keep everything on schedule along the way!
As a good rule of thumb, don’t apply for a new credit card, car loan or other type of loan while you’re waiting for your home loan to close. Also, don’t co-sign a loan for anyone else, since legally, you’ll be considered responsible for the entire debt.
Likewise, avoid running up the balance or making any large purchases with your existing credit cards. It can lower your credit score, plus any new debt hurts your debt-to-income ratio. That means the underwriter will need to take another look at your file – and potentially delay the process.
It’s common for offers to be contingent upon inspection, especially for first-time homebuyers. And the sooner you have it scheduled, the better! It will give you more time to negotiate repairs or credits with the seller, plus address any issues early that might delay your closing.
Even if you’ve been pre-approved, your lender will need to review your details before closing. Be prepared with the basics, such as two of your most recent pay stubs, bank statements and tax returns.
If possible, avoid changing jobs, getting married or making any other big life changes during the homebuying process. We know things happen! If it can’t be helped, talk to your lender right away to help prevent it from derailing your closing timeline.
It’s common for buyers to request repairs prior to closing, especially with a home inspection. Whether it’s replacing windows, making electrical updates or simple contractor work, stay on touch with your realtor on progress.
Your realtor will be happy to talk with the sellers’ agent regularly to ensure the repairs are complete, long before your final walk-through.
And last but not least, work with a lender you can trust! At Gate City Bank, we’re the #1 mortgage lender in ND, and we’d love to assist you. You can find a lender near you on our website, even if you just want to ask a few questions.
And if any changes or surprises come up during your closing process, don’t worry. We’ll work with you to keep everything moving smoothly – and get you into your new home!
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