You’ve found the home of your dreams, have an accepted offer and are looking forward to the day of your closing. Even though you’re on the right track, the house isn’t yours until you put pen to paper and receive the keys.
Closing on a new home is easier said than done, as there are a variety of things that can go wrong before or during your closing. Here are five things to protect against:
- Poor home inspection report: Maybe the termite inspection report shows serious damage. Or maybe the home has mold. Perhaps the foundation is cracked or the roof is leaking. You should expect some red flags on a home inspection report, but too many serious issues may give you cold feet. You want to deal with these well in advance of your closing.
- Appraisal concerns: More specifically, the home appraises for less than what you’re paying for it. For example, if you’re paying $500k for the home, it should appraise for at least that amount.
- Something is wrong with the title: Title insurance is designed to protect the buyer and lender against future problems. However, a title search before closing may bring some issues to light. These can include liens, fraud, forgery and judgments against the home.
- Financing disappears at the last second: Even if you receive a preapproval from your lender, you could still run into financial issues before your closing. For example, if interest rates spike, it could increase your monthly payment, thus making it difficult to afford the loan. Or maybe you lose your job before closing on the home, so you don’t have the income to proceed.
- The seller wants to back out: Cold feet can come into play when buying and selling a home. If you’re ready to proceed but the seller wants to stay put after agreeing to sell, you’ll need to work out your differences. This can delay your closing.
Any issue that has the potential to delay your closing is one that requires your full attention. Not only should you collect more information regarding what’s happening, but it’s also a good idea to learn more about your legal rights and how to protect your financial interests.