Purchasing a home or property can be scary and exciting. This transaction can be a monumental moment for both the buyer and seller, and it can be more scary than thrilling if you do not know what to expect or what to do before and after closing day. In this article, we will outline the actions you should take to prepare for the closing day as well as things to do after closing.
Before: Ask Questions.
Before closing on a home or property, you should ask yourself and your closing attorney questions to ensure you are making an informed decision and prepared for the upcoming process. In a previous blog, we discussed what you should ask a closing attorney before retaining their services. Below, we will outline the questions you should ask and answer before closing day.
What Questions Should I Ask Before Closing on My First Home Mortgage?
To better prepare for the closing process, you should ask questions and find answers to them to avoid making mistakes during the closing process. (You’re already taking a great first step by reading this article and doing research.) Here are five important questions you should ask and answer before your closing date.
- What will my monthly payment be? Even though you likely already have an idea of what you will have to pay each month, you should ensure you can afford the monthly mortgage bill along with your other bills.
- When will I have to make payments? You must know your payment due date. You should also ask or look into whether there is a grace period for payments, which is an amount of time that a payment can be paid past the due date without penalty.
- Can the payment change? Your monthly payments can change if you have an adjustable0rate mortgage or if the property taxes or insurance rates change. You should consider these changes as they can impact your budget.
- Is the neighborhood right for my family or business? Whether you are acquiring a family home or a storefront for your business or a second home or income property, you should consider whether the area is what is best for your family. You can figure this out by researching online and by walking around the area and talking to neighbors or people in the area. You don’t want to make such a major purchase without considering the area; while you may love the cabinets in the kitchen or the bathroom tile, you should also love the surrounding area.
- Do I need to get private mortgage insurance (PMI)? Certain loans allow you to pay less than 20% for a down payment, and these same loans typically require the homeowner to carry PMI, which protects the lender in the event you default on the mortgage. In most cases, you can stop carrying PMI after you owe less than 80% of the mortgage. However, until then, you should research the cost of PMI and assess whether you can handle this added monthly expense.
Before: A Buyer’s Checklist for Before Closing
Before closing day, you (as the buyer) should maintain communication with the closing attorney and your lender. They may have questions that need to be answered before closing day, and the closing attorney can help you understand what the next steps are. If your closing day is approaching, you should also:
- Review your closing documents. Before closing day, your closing attorney should send you your closing documents; you should receive these at least a day before the closing meeting. You should review the documents so that you understand what you are signing and can ask any follow-up questions.
- Check the basics. Make sure that your name, numbers, and other details included in the closing document and contracts are correct.
- Review the seller’s responsibilities. You may have asked that the seller paint the kitchen or do something before you exchanged ownership of the property. Review the final walk-through checklist so that you can ask whether they have taken care of their obligations.
- Ensure your payment is ready. You will likely need to have a cashier’s check to cover the closing costs and down payment. Plan accordingly so that you have the funds in the account you will use.
- Avoid making common mistakes. Before closing, you should avoid opening a new line of credit, starting a new job, and doing anything that can affect your financial situation or credit score as these can negatively affect you.
- Set up your homeowner’s insurance policy. Before closing, your mortgage lender will likely ask for proof that you have homeowners’ insurance.
After: 13 Things to Do After Closing Day
On closing day, you will become the legal owner of the property. Unless you and the seller stipulated that you will take possession of the property later, you can move in when you like. Here are 13 things you should do after closing to ease your transition into the new property.
- Update your contact information. Your friends and family aren’t the only people who should know your new address and contact information. You should inform your bank, tax agencies, credit card institutions, utility companies, and other companies with whom you have subscriptions or accounts.
- Deep clean. Before you move in or begin unpacking, you may want to deep clean, even if the property is new construction.
- Take measurements. You may have measured or considered where certain furniture would go in your new property before making this purchase. However, you should measure doorways and spaces again to figure out how you will get furniture or boxes on the property and ensure the move goes smoothly.
- Test smoke and gas detectors. Your property should have functioning smoke and carbon monoxide (CO) detectors. However, you may need to replace the batteries or the entire unit if they are not functioning well.
- Update your address with the DMV. After moving within the state, you must update your address on your ID or license within 60 days; if you are moving from another date, you should file a change of address with the Georgia DMV within 30 days. After correcting your address on your license, you can then update your vehicle registration information as well.
- Update your car insurance. Where you live can affect your insurance rates; once you have your moving date, you should inform your car insurer to ensure you have the right coverage and rates.
- Review your home inspection report. This report can act as a maintenance to-do list after you move into your new property. The inspector may have noted that windows need to be resealed or that the gutters are overflowing, and you can review these notes to determine what things are high vs. low priority.
- Draft a list of emergency numbers. If you have a plumbing or electrical problem, can you still use your previous service provider or do you need to find another local business? You should also consider calling some businesses to get estimates and possibly schedule routine maintenance appointments.
- Acquaint yourself with the property. You should know where your circuit box and water cutoff are as well as your water heater and other important appliances on your property.
- Handle school transfers. If you have children, you may need to begin or finalize the process of transferring them to a new school.
- Change the locks. While you may have asked the seller to provide you with all the keys (including copies) they have, other keys may still be out there. To protect yourself and your property, you should change the locks and keypad codes.
- Meet new neighbors. Consider introducing yourself to your new neighbors or saying hello if you see them when you are moving in.
- Make your first mortgage payment. During the closing, you should have been informed of when your mortgage payments would be due, including the first payment. Review your closing documents or disclosure to ensure you know when the initial payment is due.
With over 40 years of collective experience, our attorneys are known for being dedicated to excellence, knowledge, and compassionate. If you need a closing attorney, we are equipped to help you smoothly navigate the real estate closing process. Schedule a free consultation with the team at Balbo & Gregg, Attorneys at Law, PC today by calling {{F:P:Site:Phone} or reaching out online.