As the closing date draws near, there are a few questions to ask yourself to ensure you are making smart decisions. OVM Financial suggests asking yourself the following four questions before closing:
1. Is the budget realistic? Before committing to a mortgage, take a close look at your budget. Are you able to make your monthly payments and still have enough money for other unexpected expenses? It’s important to factor in potential rate increases and other items that affect your payment, such as property taxes and insurance. Along with your budget, you should consider how long you plan on staying in the home. If your plans are to leave the home sooner rather than later, it may make more sense to rent instead of buy.
2. Are there any closing costs to be aware of? Closing costs are typically 1-2% of the sale price. Be sure to know what you are responsible for paying. Many times, buyers and sellers agree to split this cost, but it’s important to understand who is responsible for paying which costs.
3. Have all the inspections happened? Depending on which state you are buying in, there may be certain inspections required. For example, in some states, there is a “home inspection” and a “pest inspection”. These inspections are used to check for any potential damage or problems with the property. Having these inspections done ahead of time can help avoid any surprises down the road.
4. Are there any other loans and/or credit applications I need to complete? Before you close on the house, you may be asked to fill out additional loan and/or credit applications. Be prepared to provide documentation of income, personal identification, and other documents.
The process of buying a house is exciting, but also potentially stressful and overwhelming. Asking the right questions before closing can save you from any surprises. It’s important to factor in your budget, closing costs, inspections, and other loan and credit documents before signing on the dotted line. With proper planning and research, the closing process will be smooth and easy.
OVM Financial’s article provides four key questions to ask before closing on a home purchase. It is important to ensure the budget is realistic, closing costs are understood, all necessary inspections are completed, and any other loans or credit applications are filled out. Budgeting for the long-term is important and should not be taken lightly when considering a permanent home purchase. Potential rate increases and other items that affect payments, including property taxes and insurance, should be thoughtfully considered. Knowing who is responsible for covering closing costs, either buyer or seller, is another important item to take into account. The completion of any required inspections, such as home and pest inspections, can help eliminate future surprises related to the condition of the property. Finally, having all necessary loan and credit applications filled out ahead of time makes the closing process smoother and more efficient. With proper research and preparation, closing on a home purchase can be a stress-free experience.
This article was contributed on Oct 16, 2023
