ettlement (also referred * Loan Approval - This is first
to as closing) is a and foremost, because you can't
critical part of the home proceed toward settlement /
buying process. closing until you get approved
for the loan. Once you're
During settlement, ownership of approved for the loan, the
the home gets transferred from settlement process is in motion.
the seller to the buyer. This
involves a lot of paperwork, a * Truth-in-Lending Statement -
lot of signatures, and usually a Shortly after applying for the
lot of questions. loan (usually within three
business days), the lender will
As a home buyer, you can prepare give you a truth-in-lending
for settlement by understanding statement. This statement shows
what you need to do before the the total estimated cost of the
actual day of settlement. This loan, including fees, interest
will make the entire home buying rates and payment terms.
process smoother and less
stressful. * Set the Date - The time and
place of settlement will usually
Some of the items on this list be agreed upon between the
may seem obvious, but I've lender, the settlement company,
included them anyway to make the and the buyer and seller.
list as complete as possible.
Keep in mind that settlement laws * Transfer Utilities - Call to
and requirements may vary from transfer all applicable utilities
state to state. (gas, electric, etc.) to your
name, effective on the settlement
Pre-Settlement Checklist: date.
* Hazard Insurance - Most lenders list all the costs you're
will require hazard and liability required to pay at settlement.
insurance, at least up to the Review it carefully. If you find
loan amount. You need this to errors or items you don't
satisfy their requirements, but understand, bring it up with your
you should also choose a policy real estate agent, attorney or
that protects your investment and settlement agent. Don't let your
give you peace of mind. questions go unanswered!
* Final Walk-Through - A day or * Certified Check - In most
two before settlement, you will cases, you will need to bring a
conduct a final walk-through of certified check with you to
the house. This is your last settlement to cover all the
chance to view the property closing costs. The amount of this
before taking ownership of it. check will be based on the
Make sure everything is as you settlement statement. Be sure to
remember it (no new damages, all bring a photo ID with you as
conveyed items present, etc.). well.
Also, if you made the contract
contingent upon certain repairs Understanding the settlement
(based on the home inspection), process will help ensure a
make sure those repairs have been smoother home buying process. Be
completed. proactive about the items on this
list. Don't just wait for them to
* Settlement Statement - At least happen -- make them happen.
one business day before
settlement, you should receive a ++ Copyright 2006, Brandon
settlement statement (also Cornett.
referred to as a HUD-1
statement). This document will
About the Author:
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Brandon Cornett
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