Have you found a suitable home for you and your family? Have you decided to make an offer on a house and the seller has agreed to sell the house to you? Have you been pre-approved by a lender? If yes, then congratulations, this is great news!
Although it is a great future step for you and your family, you should be aware of a few issues you have to take into consideration before and after closing on a real estate you have set your eyes on.
9 Tips Before Closing on a House
Many people wonder what to do before closing on a house. Listed below are several things you should pay attention to before closing on your new home:
1. Apply for a mortgage loan
Before applying for one, do research on rates and lenders. The best way is to ask for a referral from your friends or colleagues. Making a list of rates and lenders is a good idea – check lenders’ ratings by going to the Better Business Bureau.
2. Get your house appraised
Your lender will hire an expert to appraise the value of the home because the amount you are paying cannot be higher than the value of the home and the collateral.
3. Get a home inspection
Although most lenders require this, it might be one of the most useful things to do before closing on a house. If an inspector comes across any issues, you can then easily ask the seller to fix them.
4. Keep your job
Changing a job could introduce a change in your debt-to-income ratio which may affect the credit approval. In addition, there is the inconvenience of additional paperwork.
5. Don’t go on a spending spree or open new credit lines
You should know that this could also impact your debt ratio and the final credit approval.
6. Making deposits into your account
This can be beneficial to the whole process. However, make sure to prepare all the documents in connection with the deposits, as your lender could ask for these.
7. Check the title to your future home
Are you sure that the seller is the owner of the house you have decided to buy? It is better to pay a title examiner to ensure there are no other owners of your future home.
8. Be aware of the closing costs
You could expect these costs to be around 3% of the cost of the home, but you will get a precise list of all the fees a few days before closing.
9. Prepare a homeowner’s policy
The lender requires a homeowner’s policy so it is best to have it prepared. In addition, you might have to pay the first year’s premium in advance.
Things to Do After Buying a House
Now, the question we could ask ourselves is what to do after closing on a house, and what are some problems that occur when closing on a house? Once you have become a homeowner, you should consider focusing on some of the listed activities:
1. Copy all documents and keep them safe
You sign a lot of documents when buying a house. Since you might require some of them in the future, take care of them well.
2. Change the locks and/or update keypads that (un)lock the doors
This is just a reminder since you probably do not want any unexpected visitors.
3. Notify companies and people about your move
You should probably first contact the United States Postal Service to make sure the important mail is delivered to the right address. Additionally, one of the things to do after buying a house is to change the address on your documents.
4. Inspect the water heater
You could adjust the temperature of the water on your own and make it perfect for you and your family.
5. Think about an energy audit
This is especially useful for older homes since they could be energy-inefficient.
6. Do research on tax deductions and discounts
Focus on the ones that are available in your area, city, and state.
7. Be prepared for mortgage payment changes
This is advised because (adjustable) payments could change at any time.
Being a homeowner is a great experience and you should be proud of it. However, when you enter the process of buying a home for the first time, it is essential to be careful not to ignore some important aspects that could slow down the whole process and cause a lot of stress. If you make sure to avoid potential obstacles, you will soon be able to enjoy the new home and your safe haven.