The keys are yours, now what?
Congratulations! You’re a new homeowner. While you may not be able to wait to move in, there are a few things you should consider tackling before hanging those family photos on the walls.
1. Change the locks – For peace of mind, it’s a good idea to change out the locks on your exterior doors to ensure that anyone the previous owners may have given a key to can no longer access the property. According to Home Advisor, the average homeowner spends between $100-$300 hiring a locksmith.
2. Paint – Don’t love the lemon yellow the previous homeowners chose for the master bedroom? Painting your new home will be infinitely easier if you can do so before moving furniture into the space. Head to your local paint store to pick up a few samples to test before committing. Take your time and be sure to view the color swatches in different lights before committing. There are also handy online visualization tool like the Benjamin Moore Personal Color Viewer.
3. Take care of your floors – Like with painting, treating and refinishing floors is much easier without furniture in the way. Costs for this project will vary depending on the size of the job, but you can estimate roughly $200 for supplies and equipment. Check out this useful guide to refinishing wood floors from This Old House before heading to the hardware store.
4. Make any necessary repairs – Does the bathtub need to be re-caulked or the tile re-grouted? Do the floor boards creak? Make a list of priority repairs and tackle them one by one. You’ll be happy you did a few months from now when other projects crop up on the honey do list.
5. Clean from top to bottom – The only thing better than a new home is a clean new home. Now is the best time to give every nook and cranny of your home a deep clean. Scrub the inside of appliances like the refrigerator, oven, dishwasher and microwave. Wipe down walls and baseboards with a damp cloth. Looking for clever ways to banish grease and grime? Check out our Home Tip of the Day video series.
6. Set up your utilities – Call your electric, gas, cable and water utility providers to make sure service is transferred to you after closing. You’ll also want to research when trash and recycling pick-up are scheduled for your zone.
7. Change your Address – While you may want those mortgage bills to be sent elsewhere, it’s important to file a change of address with the US Postal Service to ensure that all mail is forwarded to your new address following your move. Also be sure to alert friends and family of your new address. They’ll need to know where to send that housewarming gift!
Now, the only thing left to do is celebrate! Looking for great housewarming party ideas? Try one of these backyard flings!
First time home buyers…this ones for YOU! Must read!
What are closing costs? What should I know before getting my next loan?
What Are Closing Costs?
Closing costs are fees paid in connection with the refinance or transfer of ownership in real property. They are paid by either the buyer or the seller on the settlement date.
These fees will always vary. What you pay for one refinance or property transfer will not be the same as another. This is due to the different parties involved, different types and locations of property, the financial capacity of a buyer and many more factors.
The law requires lenders to give you a loan estimate within three days of receiving your application. This document sets out what your closing costs will be. These fees, however, are not set in stone and subject to change.
Your lender should provide a closing disclosure statement at least three business days before the closing date. This is a more reliable estimate of your closing costs. Compare it to the loan estimate you’ve received and ask your lender to explain the fees and the reasons for any changes.
What Is Included in Closing Costs?
Your costs will differ depending upon the transaction. Types of costs include:
- Credit report fees (the cost of checking your credit record)
- Loan origination fees (which consists of the cost to your lender for processing your loan)
- Attorney fees
- Inspection fees (for inspections requested by either you or the lender)
- Appraisal fee
- Survey fee (so that both you and the lender know where your property boundaries lie)
- Escrow deposit which may cover private mortgage insurance and some property taxes
- Pest inspection fee
- Recording fee paid to a county or city authority to file a record of the property transfer and/or new mortgage lien against the property
- Underwriting fee to cover the cost of processing a loan application
- Discount points (money you pay your lender to get a lower interest rate)
- Title insurance (protection for you and the lender should there be any issues with title to the property)
- Title search fees (costs incurred by the company who checks the title on the property)
These fees can range anywhere from 2% to 5% of a property’s selling price. It’s smart to get estimates from two or three lenders so that you can take these costs into consideration before making an offer. For the easiest way to compare lenders who may use different terminology to describe their fees, simply ask for a loan estimate from each.
Can I Negotiate These Costs?
Some fees, such as document, processing, service, underwriting and courier charges are open to negotiation. However, third party fees such as an appraisal or survey, are not.
If you’re worried about how much you’ll need at closing you can find a bank that doesn’t escrow real estate and homeowners insurance. Often, banks will escrow six months of real estate taxes and several months of homeowners insurance premiums. When added to the other closing costs, this can be quite a large sum.
Keep in mind, however, that you will be responsible for paying your homeowners insurance and property taxes when they’re due rather than relying on your lender to pay them for you.
Where allowed by law, you can negotiate with the seller to have them pay some closing costs normally attributed to the buyer.
Can I Add my Closing Costs to the Loan?
Most loan programs will allow for a percentage of the purchase price to go towards closing costs. The easiest way to do this is to ask for a seller credit towards the closing costs.
The seller credit means that the seller will receive a smaller ‘net’ amount at closing, however there is a way to make a seller credit more palatable to the seller. If you can qualify for a higher purchase price – say 2.5% over list – the seller won’t lose any money and you can use the seller credit towards the closing costs.
In this scenario, what you’re doing is financing your closing costs over the life of the loan.
You can also do a lender credit. Like a no-cost refinance, you agree to a higher interest rate so that the lender will pay some of the closing costs. You can potentially get a lender credit of $2,000 to $4,000 – a sizeable amount of fees.
Keep in mind, however, that should you continue paying the same mortgage over the life of the loan, you could end paying more than if you were to pay up front.
What Can I Expect?
Before closing day arrives, contact your agent to confirm that he or she has everything for the transaction to go as smoothly as possible. Pull together any paperwork that you have received and keep it on hand for easy reference on closing day.
Be prepared to take your time reading through all of the closing documents. Make sure you completely understand all of the terms you’re agreeing to. If some of the terms are missing or incomplete, don’t sign until they are resolved to your satisfaction.
Your lender will send money to the closing agent via a wire transfer and may require that you set up a new escrow account with them to pay your property taxes and homeowners insurance together with your monthly mortgage payment.
You should be advised before closing day how much money you’ll need to have for closing, so bring your checkbook with you to cover any necessary escrow and/or closing costs.
Among the many documents you’ll be signing, three of the most important documents will be the:
- Hud-1 Settlement Statement – a document which sets out the costs incurred with your closing.
- Deed of Trust or Mortgage – a document in which you agree to a lien being placed against your property as security for repayment of your loan.
- Promissory Note – a document which can be described as a legal “IOU” which sets out your promise to pay according to the terms of the agreement.
Source: CB Blue Matter