Home

4. What is an estimate of the closing costs? They are required to give you these within three days of the loan application. 5. Is there a prepayment penalty, if so how is it calculated?

6. Can you lock in the interest rate? By doing this if the rate goes up you keep the lower rate. Ask them what their indicators are for loan rates. They should know if rates are going up or down. If you lock in and they go down you are stuck with the higher rate.

7. Which is better for your situation – fixed rate or adjustable rate?

8. What do you need for your down payment? How will the amount affect your loan and costs?

9. For what types of loans do you qualify? Veterans loans (VA), FHA, low rate for first time home buyer, etc.

10. How long will it take to process the loan and how long until closing?

11. Will there be an escrow account? What are the fees for this? Do I have to have one?

12. Will I have to get PMI – Private Mortgage Insurance

13. Ask about getting a pre-qualification letter and when and how you can get a pre-approval letter. Pre-qualification means that you gave your financial information to a lender and they determined that if what you say is accurate you will probably get the loan. Pre-approval letter is what you get when you have given the information to the lender, they have checked the accuracy and will give you a loan if you find a house meeting the pricing criteria.

Preparing for Closing

Assuming that you got the loan and the house. What happens at closing:

Closing is actually the finish of two deals;

1. Signing the papers between you and your lender. They are giving you the money and they are making sure that you will be paying them back.

2. An agreement between you and the seller giving you ownership of the property.

There will be lots of signing and it generally moves quickly. Don’t let the speed intimidate you. If you have a question ask it. If you would rather your real estate agent ask the question tell him.

Make sure that there are no blanks.

Make sure that everything promised has been done. If it isn’t done get it in writing that it will be, otherwise, you will have a problem.

What should you do or have done? If you have an agent he/she will remind you each step. In theory everything for a closing should be done ahead of time. It rarely is. It is a good idea to bring all your paper work with you.

Good faith estimate

Contract

Proof of title search & title insurance

Food certification & or flood insurance

Proof of homeowners insurance

Proof of private Mortgage Insurance

Home Appraisal

Inspection Report

Survey

About a week before closing ask to review the loan process with the lender – Is everything ready. Your agent will usually do this for you.

Deposit your down payment funds into your account about a week before closing. Your money trail should be obvious. They want to know that you didn’t borrow the money from Uncle Fred so they need to be able to see from where it was transferred. Actually, those funds should have been obvious much earlier on when the lender was checking your credit.

Ask for a walk through the day before closing - Make sure repairs have been made that were promised and that things aren’t missing that should be there.

If need be you can ask to move the closing. Again, if something isn’t done before closing – make sure it is put in writing that it will be done. Make sure it is signed.

If you are the buyer ask for “all keys”, the garage door opener, any security codes, any manuals that tell how things work, warranties (appliances, hot water heaters, etc.), any type of special things you have to do to get something to work. (Example: Peggy, my wife, has to threaten me to get something done and I have to often threaten my computer to get it to do something).

In this part of Kentucky is us usual for the new owner to move in right after closing, that means the seller had to have already moved out. If that is a problem it should have been addressed in the contingency phase of negotiations.

Now welcome to the real job – keeping your new house neat and maintained. A good agent will check on you over the next several weeks to make sure that everything is as it is suppose to be.