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Common Questions About Loan Closing
What does a home inspector do, and how does an inspection figure into the purchase of a home?
An inspector checks the safety of your new home. Home inspectors focus especially on the structure, construction and mechanical systems of the house and will make you aware of any repairs that are needed.
The inspector does not evaluate whether or not you are getting a good value for your money. Generally, an inspector checks:
- the electrical system,
- plumbing and waste disposal,
- the water heater,
- insulation and ventilation,
- the HVAC system,
- water source and quality,
- the potential presence of pests,
- the foundation, doors, windows, celings, walls, floors, and roof.
Generally the SRPMIC Engineering / Construction Services Department and their qualified, experienced staff facilitate the inspection. Upon acceptable completion of the inspection they will issue a Certificate of Occupancy which is necessary for you to occupy your new home. The certificate will not be issued if there are any unresolved repairs or defaults.
Do I need to be there for the inspection?
It's not required. Following the inspection the inspector will be able to answer questions about the report and any problem areas. You will have an opportunity to hear an objective opinion on your home and ask general maintenance questions.
What should I look for during the final walk-through?
The walk-through will likely be the first opportunity to examine the house without furniture, giving you a clear view of everything. Check the walls and ceilings carefully, as well as any work the contractor agreed to do in response to the inspection. Any problems discovered previously that you find uncorrected should be brought up prior to closing. It is the contractor's responsibility to fix them.
Are other types of inspections required?
If your home inspector discovers a serious problem, another more specific inspection may be recommended.
Do I really need homeowner's insurance?
Yes. A paid homeowner's insurance policy (or a paid receipt for one) is required at closing. Arrangements will have to be made prior to that day. Plus, involving the insurance agent early in the home buying process can save you money. Insurance agents are a great resource for information on home safety and can give tips on how to keep insurance premiums low.
What steps could I take to lower my homeowner's insurance costs?
Be sure to shop around among several insurance companies. Consider the cost of insurance when you initially start the home ownership process. Newer homes and homes constructed with materials like brick tend to have lower premiums. Avoid areas prone to natural disasters, like flooding.
What are Pre-Paid Expenses and Closing Costs?
There may be closing costs customary or unique to a certain locality, but closing costs are usually made up of the following:
- Escrow Fees
- Interest (paid from date of closing to 30 days before first monthly payment)
- Loan Origination Fee (cover lender's administrative costs)
- Recording Fees
- First premium of homeowner's insurance
- First payment to escrow account for future insurance
- Paid receipt for homeowner's insurance policy
- Any documentation preparation fees
- Appraisal Fee
- Credit Report
What can I expect to happen on closing day?
You will present your paid homeowner's insurance policy or a binder and receipt showing that the premium has been paid. The closing agent will list the funds you owe to the lender (remainder of down payment, closing closts etc.). The lender will provide proof of warranties.
Once you understand all the documentation, you will sign the mortgage, agreeing that if you do not make payments the Lender is entitled to sell your house (in accordance to the Residential Land Lease provisions). You will also sign a mortgage note, promising to repay the loan.
You will pay the Lender all closing costs and in turn, he or she will provide you with a settlement statement of all the items for which you have paid. The deed will then be recorded with the BIA and you will be a homeowner.
What do I get at closing?
- Copy of all documents you sign at closing
- Keys to your new home
- Receipt for fees paid