Key Terms
DEBT-TO-INCOME RATIO The percentage of an individual’s monthly gross income relative to the amount of debt owed. FINANCIAL STATEMENT A formal record of all your financial assets, debts, and liabilities. TITLE (SETTLEMENT) COMPANY The settlement company, also called a title company, ensures the contract is fair to all parties and manages the money throughout the process. Working with your attorney, the seller hires the settlement company, which is paid through the closing costs. SPECIFIC TESTS Tests like radon and termites require separate contingencies in your offer. Your agent can walk you through your options. WALKTHROUGH The buyer reviews the house just before closing to make sure everything is in the same condition and that all home inspection items are fixed.
08 Clear Mortgage Contingencies If you are obtaining financing, you will have a mortgage contingency of typically 30-45 days to obtain a mortgage commitment. Once your lender has all of your documents, they will send it to underwriting to review. Once underwriting has issued a Clear-to-Close, your loan is complete and the file will be sent to the title company for closing.. 09 Final Walk-Through Before we head to the closing table, we’ll have a final walk through of your future home. This is our chance to make sure the sellers made any repairs agreed to, all appliances and fixtures negotiated were left behind and that the sellers didn’t accidentally damage the home when moving out.
APPRAISAL Assessment of the property’s market value, typically done for the purpose of obtaining a Mortgage. LOAN OFFICER The loan officer represents a financial institution and provides a loan to the buyer. PRE-OFFER INSPECTION A pre-offer inspection is an inspection of the home before you make an offer. It is a way to make your offer stronger in a competitive market. ATTORNEY You will need legal counsel to close on your home. The attorney will review all contracts and help negotiate inspection and other key terms. We can provide referrals for local real estate attorneys if needed. APPRAISER The lender will hire an appraiser to place a value on the property before approving your loan. EARNEST MONEY DEPOSIT (EMD) A good faith deposit the buyer makes with an offer to show that you are serious about buying the property. In exchange, the seller agrees to stop marketing the property. I NSPECTION An expert conducts a formal review of the property to find visible issues that need to be repaired. You can make your offer contingent on an inspection or conduct a pre-offer inspection to make your offer stronger. I NSPECTION CONTINGENCY You can make your offer contingent on a home inspection. If the inspection uncovers issues, we can determine the best way to move forward. HOA ASSESSMENTS Monthly maintenance fee paid by condo owners. Property taxes are not included in the common charge. INITIAL EARNEST MONEY DEPOSIT A percentage of the agreed-upon purchase price paid by the buyer at the time of signing the contract.
LIEN SEARCH The Title Company conducts a
background check on the property and the seller to ensure there are no outstanding debts or claims upon the property. PRE-APPROVED Advanced approval from a bank or other lending institution for a home mortgage. PRE-QUALIFIED Potential buyers provide an overall financial picture and mortgage brokers provide an estimate of what level of loan you will likely be pre-approved for.
10 Closing
We will attend your closing together along with your attorney and the seller’s attorney at the office of the seller’s title company. Your attorney will explain each form you need to sign and will review the numbers on the settlement statement. Closings typically take a couple of hours on average. When closing is complete, you’ll receive the keys to your new home!
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