What To Know Before Closing On Your New Home

Deciding to buy a house for the first time can be a challenge if you’re not familiar with the legal and financial transactions involved. Here’s a quick guide to help you through some of the most common paperwork that’s required by the insurance, warranty, appraisal and mortgage statement.

Homeowner’s Insurance

Get price quotes from multiple insurance companies. We recommend contacting at least three different companies in order to get the best comparison of coverage, price and customer reviews. Choose the company that earns your trust, not necessarily the one that offers the lowest price. One financial-minded tip: Don’t pay for more coverage than you really need. You can also reduce homeowner’s insurance costs by raising your deductibles (though this might not be a good option in disaster-prone areas). Also, try negotiating for a discount. Some companies empower their brokers with the ability to discount a certain percent off the final cost.

Home Warranty

If you are a first-time home buyer, it might be a smart idea to have a warranty plan, so that you can sleep well at night knowing your investment is protected. Experienced homeowners might also consider a warranty so that they don’t need to worry about maintenance and repairs. The cost of a home warranty typically fluctuates between $250 and $400, depending on type of coverage. The payment must be made one year in advance and on the day of expiry can be renewed or not.

Appraisal vs. Property Inspector Evaluation

The main difference between an appraiser and an inspector is that an appraiser will only look for obvious issues in a home. Inspectors dive deep into the details, checking on everything from plumbing to the air conditioning system. The appraisal report is required by the bank and cost is included in the mortgage.

Closing Statement – Your Rights

According to law, a real estate transaction is considered “closed” when a closing or settle statement in signed. At this point, the buyer becomes the new owner of the property. This document must include comprehensive details about fees incurred by all parties.

The buyer has the right to visit the property 24 hours before closing in order to make sure that everything is according to the settlement and any issues have been fixed. As a buyer, you should also receive the settlement 24 hours before signing in order to compare it with the Good Faith Estimated for discrepancies.

Are you you in the process of selling your house and looking for a new home? Let RedStone Mortgage assist you in finding loan options that meet your individual needs. Call us at 480-759-1500.

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