What to Do Before Closing on a House?

The journey to homeownership culminates in the closing, a significant event formalizing property transfer. This final step involves detailed preparations for a seamless process. Completing these actions helps prevent delays and finalize the purchase. Careful attention ensures a smooth transition into your new home.

Confirming Financial Readiness

Financial preparation is a primary step before closing. This involves calculating the precise funds needed: down payment, closing costs, and any required prepaid expenses. Closing costs typically range from 2% to 6% of the loan amount, varying by loan type and location.

The “cash to close” figure on your Closing Disclosure represents the total funds required at closing. This includes your down payment, closing costs, and pre-paid items like property taxes and homeowner’s insurance premiums. Compare this final Closing Disclosure with the initial Loan Estimate to identify any notable changes in costs or terms.

Transferring funds for closing requires careful execution, with wire transfers or cashier’s checks being the primary methods. For wire transfers, verify all account details directly with the closing agent or title company via a confirmed, independent channel (e.g., a phone call to a known number) to guard against wire fraud. Initiating the transfer several days before closing allows ample time for funds to clear. Obtain a cashier’s check from your bank, payable to the title company or closing attorney, for the exact amount specified.

Performing Final Property Verification

A final walk-through is conducted within 24 to 48 hours before closing. This inspection confirms the home’s condition aligns with the purchase agreement and all agreed-upon repairs are complete. It also ensures no new damage has occurred since the initial inspection.

During this walk-through, check all appliances and fixtures included in the sale to confirm they are present and working. This involves testing electrical outlets, running water in sinks and showers, and verifying heating and cooling systems. Confirm the property is vacant and free of the seller’s personal belongings, unless otherwise specified.

Bring your purchase agreement, the home inspection report, and any written repair agreements to reference during the walk-through. A phone charger can be useful for testing outlets, and a camera can document any concerns. Should any issues be discovered, immediately notify your real estate agent to determine the appropriate course of action before proceeding with closing.

Reviewing Key Closing Documents

Understanding the legal documents signed at closing is important for a home purchase. The Closing Disclosure (CD) is a five-page document lenders provide at least three business days before closing. This form details the final terms of your loan, projected monthly payments, and all closing costs. Review each section, comparing it to your initial Loan Estimate for any discrepancies beyond allowed variances, including loan terms, interest rates, and escrow details.

Beyond the Closing Disclosure, you will encounter other loan documents. The Promissory Note outlines your promise to repay the loan, specifying the interest rate, payment schedule, and terms of default. The Mortgage or Deed of Trust legally pledges the property as collateral for the loan. Both documents define your financial obligations and the lender’s rights concerning the property.

A Title Commitment is provided by the title company, outlining conditions for title insurance issuance. This document details the property’s legal description, identifies the current owner, and lists any liens, encumbrances, or other issues affecting the title. Title insurance protects both you and the lender from potential future claims against the property’s ownership.

The Deed formally transfers property ownership from the seller to you. It serves as proof of ownership and is recorded with the local county to establish a public record. If any part of these documents is unclear, seek clarification from your real estate agent, lender, or attorney before the closing appointment.

Preparing for Closing Day Logistics

As closing day approaches, organize final practical details for a smooth home purchase. For the closing appointment, bring valid government-issued photo identification (e.g., a driver’s license or passport) to verify your identity. Have proof of your fund transfer (wire transfer confirmation or cashier’s check) ready. A personal checkbook can also be useful for any minor, last-minute adjustments or fees.

Bring copies of all necessary documents, including your Loan Estimate, Closing Disclosure, and inspection reports, for reference. Confirm your homeowner’s insurance policy is active and coverage begins on the closing date, providing proof to your lender. This step is a requirement for mortgage approval and protects your investment.

Arrange for utility services to be transferred into your name. Contact electricity, gas, water, and internet providers to schedule service activation coinciding with your closing or move-in date. Forward your mail through the United States Postal Service (USPS) online or in person, ideally about two weeks before your move. Update your address with banks, employers, and other personal accounts.

Confirm the exact time and location of the closing appointment with your real estate agent or closing attorney/escrow officer. While keys are typically received on closing day, this often occurs after the loan has been funded and the deed recorded, which can take a few hours or, in some cases, until the next business day.