Congratulations! You’ve hoped for, and found, the house, you believe, best serves your needs, requirements, concerns, etc. If you are like most people, you will be using a mortgage, to provide a significant amount of the necessary payment, and gone through the trials and tribulations of the process, and emerged successfully approved, for the amount you needed and/ or desired. Finally, before the deed on the house, transfers from the present owner, to you, you will have to emerge from what many first – time buyers, refer to, as the dreaded, real estate closing. Let’s review 5 things, which may be requested from you, so you aren’t surprised, but rather are as prepared as possible, thus making this, go far more smoothly, and with less stress!
1. Where the earnest money came from: Lending institutions often question, where one got the funds, to put down, also known as the earnest money. For example, if a property sells for $500,000, and you are to put 20% down, that means $100,000 down – payment. Generally, when you sign the contract, you will be expected to put an amount down, known as earnest money. This amount is often 10%, so in this case, someone would put $50,000 down, upon signing the contract, and a similar amount payable at the closing. You might often be asked to show where this money came from, by submitting a few months bank statements, or investment statements, etc.
2. Tax returns: Mortgage banks and brokers, generally require the buyer, to submit the two, most recent, years, tax returns. This is generally done, by signing a form, permitting, them to get these from the government. Be prepared to answer anything, which might tend to be somewhat confusing!
3. Investment statements: Gather the investment statements from your investments. Generally, you will be asked, also, for the past year, or two, and especially, the most recent few quarters.
4. Bank statements: You’ll have to provide, at least, the last 2 bank statements, and some might ask for 3 or 4. Be certain these indicate, clearly, you can afford the home, you are purchasing.
5. Know your credit rating: Do you have a, high – enough, credit rating, to assure the lending institution? The best approach, is to fully evaluate this, carefully, prior to begin your house – hunting!
There are many other closing requirements, but the above 5, are consistent, and, if one is prepared properly, should be no problem! As the Boy Scout Motto goes, Be prepared!