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Articles for Buyers, Sellers, and Investors

From Start to Closing

Once you’ve submitted your mortgage application and received a decision, the steps leading up to your closing will probably seem quite familiar.  But it is a good idea to review them so you remember what to expect. Prior to closing on your new home, you’ll need an appraisal, a home inspection, home insurance, and title insurance.

APPRAISAL

Robert Simpson will help you find a professional appraiser to determine the value of your home. Most loan programs require an appraisal to make sure the sale of the property would provide enough funds to repay the mortgage balance. This protects the lender in case of default, and can also help you make sure you don’t overpay for the home. An appraiser will give you a professional assessment of the property’s value based on a number of factors, including:

  • Square footage, overall condition, special features and amenities
  • Home improvements
  • Property location
  • A review of the sales prices of comparable properties that have sold recently in your area

HOME INSPECTION

A professional home inspection can help put your mind at ease by identifying any potential issues with the home. In some cases, a home inspection may be required as part of your loan approval process. A home inspector will give a professional assessment to the property’s physical condition and notify you of any existing or potential problems.

At minimum, the inspection should go over all the home’s major systems and structural elements, including the foundation, electrical system, heating and cooling systems, insulation, roofing, plumbing, and all exterior features.

You should make every effort to be present during the inspection, so you can see any problems first hand. Accompanying the inspector can make the inspection report easier to understand, and you may even get some valuable maintenance tips.

HOMEOWNERS INSURANCE

Before you close on your mortgage, you’ll be required to show proof that you’ve purchased homeowners insurance. Your policy should reimburse you for damage done to your home or it’s contents by natural hazards such as fire and wind, and protect you from liability if someone is injured on your property.

TITLE INSURANCE

There are two types: one protects the lender only and one protects both the borrower and the lender. Together, the coverage protects you and your lender from claims against your ownership of the property.

Such claims may be made by: undisclosed spouses, heirs of previous owners, creditors holding liens against previous owners, or other parties. Your lender will most-likely require you to purchase a title policy which will cover their interest in the property.

It’s up to you if you would like to purchase a policy to protect your interest in the home. Robert Simpson will be able to recommend a title insurance company who can provide you with additional information about the policies available in your area.