Buying a house is a big step in life. You should know that it is not an easy process and that it demands a lot of research and involvement. If you made an offer accepted by the seller and you've provided the mortgage lender a copy of the agreement, you are probably waiting for the settlement day. In order avoid common problems that may arise in the final stages of this process, you have to understand certain requirements.
When buying a house, you must assure yourself that it has a clean title (that it’s free from doubt as to its validity). In other words, it should be free of any liens, judgements, assessments or unpaid taxes. You can have this information checked by hiring a title company. Firstly, an attorney will take a research on the property by obtaining a plat map. When the attorney approves the property, you'll receive a title insurance policy provided by the title company. This way the company guarantees that claims can’t be raised in the future. You can also search for property ownership and titles by yourself, using online people search engines.
Estimate the Pricing
During the process of buying a house, you will be informed by your business partner, whether it is a realtor or a mortgage broker, of certain costs that follow up the purchase. These expenses are usually fixed and based on the size of the property or the amount of transaction. For instance, one of these fixed costs is taxes on transfer of the property from the seller to the buyer. They are also known as document stamps and their fixed rate is .07 cents per hundred US dollars.
In order to be prepared for the big day, you should inform yourself about all costs that follow up the transaction. A common percentage you should add on the original price is about 3%. This way you won't come up short and will have enough to cover all taxes and fees. Consider that these costs are one-time fees that are a necessary part of the transaction and may be higher if you are receiving a mortgage.
If you're aiming for a loan to buy a house, after making an offer you must look into the financing commitment to the lender. Mortgage companies will provide you with a budget depending on their assessments of your financial situation.
Avoid Transactions before the Closing Day
Regardless of the fact whether you've been pre-approved by your lender, there's still a possibility of facing issues before the closing day. Be sure to stay qualified until the last moment, as you'll have to remain in a stable financial situation. In case you withdraw any money or make a transaction, you will probably need to have a written explanation to your mortgage company. They will ask to see a record of the transaction as well. In order to stay away from complications and quicken the process of buying the house, you should avoid these situations.
Another thing that a buyer must also secure before closing on a house is the homeowner's insurance policy. This protects both buyers and lenders, where the lender must be named as the mortgagee. In fact, when a mortgage is requested, the homeowner is required to provide the proof of insurance on the property to the lending bank. These policies usually cover four incidents on the insured property - interior damage, exterior damage, injuries that arise whilst on the property and loss or damage of personal belongings.
As it is not mandatory before the closing, a home inspection is highly suggested for all buyers. This service will inform you about the house conditions and possible issues. Home inspections can't guarantee you a life expectancy on any features of the house, but can provide you with an insight on the current state of things. If any repairs are demanded, the seller is required to cover the expenses for repairing. This way you can negotiate the final pricing before the big day.