Dec 21 2021

Preparing for Your Mortgage Closing

What happens during the run-up to closing day? What to Expect with a Home Inspection? What should you know about the appraisal? Get the answer to this questions here.

You feel so close to the finish line. After an exhaustive search, you finally found the home that’s perfect for you. The unnerving wait to get your loan approved has passed. It’s almost time to move in, so close that your mind is consumed by packing details and decorating ideas. But one final step should be foremost in the minds of homebuyers at this point: closing your loan. 

What happens during the run-up to closing day? 

Closing day, when the buyer takes ownership of a home, usually happens about four to six weeks after a purchase and sale agreement (or PSA) is signed. During this part of the closing process, the funds of the buyer sit in an escrow account while all the conditions, such as an inspection and an appraisal, are met. 

What to Expect with a Home Inspection 

Unlike appraisals, home inspections aren’t always required by lenders as a condition of approving a mortgage loan. But it’s still a smart idea for any would-be homeowner to get an inspection; even if the inspection doesn’t reveal any issues, the cost is worth the peace of mind alone. Inspections usually go over the big basics such as structural integrity of the house, the electrical, heating, and cooling systems, plus any major appliances. For identifying asbestos, mold, lead, and pest issues, you’ll have to get a specialized inspector. 

How much should you expect to pay? That varies, but typical pricing ranges from $200 to $500, depending on the size of the house, the skill level of the inspector, and the kind of inspection you want — standard or specialized. There is no federal standard for licensing home inspectors, so it’s state-by-state whether home inspectors need to be licensed. 

What should you know about the appraisal? 

As a home appraisal ensures that you and your lender don’t overpay for a property, it’s a required and necessary part of the process. While your lender will order the appraisal, bear in mind that the appraiser is totally independent, barred by law from being affiliated with the lender or the buyer to guarantee neutrality and fairness in the process. You can expect to pay anywhere between $300 and $450 for the appraisal. 

And after you get the appraiser’s valuation? If you’re lucky, the appraiser will value the house as being worth more than the agreed-on purchase price. You can then celebrate the good news that you’ve got more equity in your soon-to-be home than you previously thought. If the appraiser comes back with a value that’s lower than the purchase price, that’s not-so-good news; lenders often won’t lend more than a house is worth. That leaves you with a few options: you can come up with the cash to make up the price difference; you can negotiate a lower price with the seller; or you can walk away. 

While the Underwriting is Underway 

As you’re focused on the appraisal and inspection, your lender will be busy underwriting the loan, verifying information such as your income, debts, assets, and other details that are necessary for the final approval of the loan. While most of this work will be out of your hands, your lender may need additional information from you, such as the sources of your bank deposits or proof of your assets. You should fulfill these requests promptly to keep the date of your closing day on track. 

Also, during this period, it’s important to maintain stability with your spending and all financial moves. This means no new loans or new lines of credit and no big purchases that could have an impact on your overall assets. The amount a lender is willing to loan is calculated using your DTI, or debt-to-income ratio; any change in the ratio could mean a change in your mortgage loan and could sink the entire deal if your DTI ratio goes beyond 45%. 

Getting Your Closing Disclosure 

Three business days before closing, you’ll get a Closing Disclosure document, which lays out the closing costs and terms of the loan. So you’ve got three days to review the details, which should track closely with the Loan Estimate you got from your lender when you applied for the loan. If there are discrepancies, say the closing costs are 10% higher or more, you may wish to go back to your lender for clarification and review. Keep in mind that as you’re 72 hours or fewer from the closing at this point, issues with the Closing Disclosure stand a good chance of delaying the closing date. 

The Final Walk-Through 

Most home sales include a walk-through that happens 24 hours before closing. It’s the final chance to make sure that any repairs that were agreed on are done and that everything is in good condition. Hopefully, all the issues have been resolved before this late step, so the walk-through is usually just to offer a sense of assurance to the buyer. But if issues do arise, such as incomplete repairs or something that was included in the deal that isn’t there, the real estate agent can usually take point on the resolution. 

What to Expect on the Big Day 

Your closing will probably happen at the office of the title company, at a real estate agent’s office, or perhaps at the office of an attorney. Those in attendance usually include the seller and buyer and their respective agents, a representative from the title company, and a loan officer. Your closing checklist should include all the documents related to the sale, proof you have homeowners insurance, a copy of the purchase contract, and your government-issued photo ID. Plus, if your closing costs aren’t rolled into the loan, a cashier’s check or proof of a wire transfer to cover these costs. There will be lots of documents to sign, and you should read them all, as the documents are legally binding and lay out your financial responsibilities. Because of this, closing usually takes a few hours. 

And Then… Welcome Home! 

With keys in hand, it’s time to enjoy your new house! For many, it’s been a months long journey from first looking to move-in day. So relish these precious moments at the start of a new phase of your life. 

Interested in purchasing a new home? Call today to get pre-approved.

These days, more and more people are looking to buy their dream homes, especially as remote work and work-from-home setups have become an enduring trend. A 15 point increase in requests for home tours and other home-buying services, along with a 11% rise in Google searches for homes, indicate an uptick in demand to buy houses in the country. However, there is a definite worry about affordability when it comes to housing, especially as hefty price tags on available residences have kept the market just as competitive as before, if not more.

According to the latest reports from analysts, it’s not all bad for existing homebuyers and aspiring house hunters. As previous data shows, timing matters in the housing market, and working on different approaches to home buying – like through a reliable lender – can help advance you towards more affordable housing goals. Below, we discuss whether house hunters should buy now or wait, and why.


What is your financial situation?

Counter to the rise in home demand, there is a considerable lack of supply. Along with rising prices and interest rates, the housing market may seem like a highly competitive space with wealthy homeowners fighting for what little property is left. It can be overwhelming, but knowing where you stand financially can help you better strategize your home buying journey. Following the four key components of affordability, ask yourself:

  • How much do you have saved for a down payment?

  • How much does your household earn?

  • What debts do you carry?

  • What is your credit score?


Familiarizing yourself with these components will help inform your decision on whether or not to wait. For example, taking the time to improve your credit scores before committing can save you from higher interest rates in terms of your monthly mortgage payments. Alternatively, many young homebuyers are compromising by living with family for a significant amount time to save up for a down payment. Getting this out of the way when you’re able to can help you get better loans to buy sooner than later in case interest rates end up increasing.

What kind of home is best for you?

Buying a home is a huge purchase and a big commitment. With shifts to digital and remote ways of working taking place in recent years, this has provided homebuyers with opportunities to be more flexible when buying homes. Homes in areas away from busy cities and urban hubs, for example, are considerably cheaper. This makes them a perfect option for buyers who work from home, or aren’t required to be present in the office on a consistent basis.

The lifestyle you expect to live is as much a factor to consider as money. Condos and townhouses offer lower maintenance costs in the long run, and are perfect for smaller households when compared to single-family homes. If the household grows, homebuyers looking for a side income can even invest in renting out purchased properties to passively earn back what they spent and look into bigger properties for family use.

What does the future look like?

In a previous post, we talked about the rising mortgage and interest rates. While the market may seem bleak or intimidating in its current condition, housing experts also believe factors such as supply have a high chance of returning to pre-pandemic levels by the end of 2024. If you are financially able, buying now while others may be intimidated by the prices can give you an edge. Conversely, taking some time to get your finances in order can benefit you when it comes to securing better loans and lower interest rates.

Working with experts can help you make better decisions for the loans you need, making sure you don’t get trapped with high interest rates or hidden charges. The future of fintech suggests that big data is the future of loans, as more online lenders are now using algorithms, which predict potential defaults better than FICO scores do. Data is also leveraged precisely to identify customers who fit various products well — which can give you peace of mind, as an aspiring borrower. Here at City Lending for example, we find the right programs to fit your needs and profile, making sure you get some of the lowest down payments and interest rates along with a premium service.

And if you’re still unsure, it’s worth considering that waiting it out in the market’s current wild conditions could result in even higher interest rates in the future. At the end of the day, buying a house is ultimately a huge investment, which comes with benefits such as privacy and a financial investment that for the most part will weather most economic storms.

Find out if this is the right time for you to get a house by contacting one of our loan officers today.


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Written by Alicia Christopher

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