Finding your dream home is exciting, but the closing process can be a stressful time, especially for first-time homebuyers. Being prepared — including having a great real estate agent, loan officer and title agent on your side — can help.
Are you about to embark on your homebuying journey? Here are answers to some of the most commonly asked questions about closing to get you ready for your upcoming home purchase.
Q: What is the difference between earnest money and a down payment?
A: You put earnest money down when you make an offer on a house. It motivates you to follow through on the sale and, if you don’t, the seller gets to keep it (unless there are contingencies). A down payment, on the other hand, is money due at closing. You’ll usually need between 3% and 20% of the home’s price, depending on your loan type.
Q: What should be done before closing day?
A: Closing day is the last step in the homebuying process. Before you get to that point, you should have your appraisal and inspection done, the final walk-through completed and homeowners insurance secured.
Q: What do you need to bring to closing?
A: You’ll need to bring the money for your down payment and closing costs. This is often paid via cashier’s check, but your lender will specify payment type before closing day. You will also need your government ID, reports from your inspector and proof of insurance.
Q: How long does the entire closing process take?
A: The closing process typically takes a couple of hours, though it depends on how prepared all parties involved are. It may take longer in states where an attorney is required.
Are you ready to buy a home? Reach out for help, from the start of the house hunt to your closing-day appointment.
