Closing on a new home can produce anxiety in many home buyers. There is much to do in preparation of closing day, and sometimes this process can seem a bit overwhelming. But there are several things that a home buyer can do before it is time to close on their Florida home that will make the whole process a lot easier and less stressful.
Preparing for closing day
When you decide to have a new Florida home built, carefully select a builder that you are comfortable working with and one that will keep you informed throughout the process of purchasing your new home. Ask your builder for a firm completion date on the construction of your home. This way, you can complete your preparations and set an appropriate closing date.
Financing your new Florida home
Most banks have a mortgage specialist on staff to help you explore your finance options. If you have a good working relationship with your bank and plan to finance your home through that financial institution, then speaking with a mortgage specialist there is the best thing to do.
However, it is sometimes better to seek a mortgage specialist outside your bank. The reason for this is that a mortgage specialist looks at loan terms from several different lenders in order to find the best mortgage with the lowest points and interest rates. Sometimes this “shopping around” for the best loan can save you a great deal of money.
What you need to do once you find a lender
After deciding on a mortgage specialist, you will need to obtain a Good Faith Estimate of closing costs. This is important because you need to know how much money you will actually need from your lender on closing day. You will also want to get a rate lock guarantee from your lender so the interest rate you originally agree upon does not change by closing time.
Since there are many types of loans available to today’s home buyer, you will want to carefully discuss each option with your mortgage specialist. Depending on your income and how long you plan to live in your home, you may be best served by a traditional, 30-year fixed rate loan. Or you may be better off with a variable rate or interest only loan. There is no one type of loan that is right for every buyer. You will need to carefully examine your individual situation before deciding on the loan type that is best for you.
Save time and reduce stress by gathering your documentation in advance
There are several documents that almost all mortgage specialists and lenders will request. If you have this documentation put together ahead of time, you will greatly increase the speed and ease of your loan approval.
The first thing a lender usually requests is verification of income. To do this, you will need the previous year’s W-2 form, one month of bank statements, and your most recent pay-stub that shows a year-to-date income. A lender can verify income by contacting your present employer, but this often slows down your application process. You will also need to submit a copy of the signed sales contract between you and your builder.
Obtaining homeowner’s insurance for your new Florida home
Before the close of any home loan, you will need to provide proof that your new property is insured. If your current automobile insurance carrier also offers homeowner’s insurance, you should check with that company first. Many agencies offer multiple-policy discounts, and will write new policies for existing customers (even during the height of hurricane season) that they wouldn’t write for new customers.
If you don’t have an existing insurance provider that also offers homeowners insurance, give yourself plenty of time before your closing date to find an insurance company that will offer the best policy for you. This is not an area where you want to wait until the last minute. Finding insurance should be one of your top priorities because without it, you can’t close on your new home loan.
Stay informed throughout the process
Keep in touch with your builder, lender andor mortgage specialist, and your insurance company throughout the closing process. This way, there will be no surprises on closing day. Remember, the home buyer who is informed and well-prepared has the best chance of achieving a stress-free closing.