Listed below are the most common types of information and documentation required at a closing. Other items may be necessary as a result of your particular loan, so it is best to check with you lender and closing agent to confirm if any additional documentation is required.
- Lender’s Conditions for Closing
- Homebuyer Warranty
- Termite and Moisture Letter
- Homeowner’s Insurance
- Flood Insurance
- Power of Attorney
- Cashier’s Check
Often times lenders will require additional debt to be paid off at the time of closing. This debt can include credit card and automobile loans. You will need to provide to your closing agent the name, account number, billing address, and phone number for any creditors who are being paid at the time of closing. Your most recent statement from these creditors is the best source of information.
As a new purchaser you might want to consider purchasing a one year home warranty. A home warranty generally includes coverage for heating/cooling systems and appliances. However, different companies will offer different coverage options so you should check with your real estate agent to determine which warranty is best for you.
Certain lenders will require a recent survey to be performed on the property. A survey will alert you to any potential problems regarding any encroachments, boundary line disputes, overlaps and roadways. It will tell you where your boundry lines are in case you wish to put up a fence or add a swimming pool. It will also tell you if you are in a flood zone or if there are wetlands on your property.
Most lenders will require a termite and moisture inspection to be done 30 days prior to closing. In our area, this is a very important inspection due to our very humid climate. The termite/moisture letter will address any active termite or moisture damage. If the letter does disclose damage, most lenders will require that the damage be corrected prior to closing.
Your lender will require you to purchase a homeowner’s insurance policy (also called hazard insurance). This policy insures against loss suffered from fire, wind, hail and other casualties. Typically, the first year’s premium will be collected at the time of closing. (Once you have obtained a homeowner’s insurance policy please provide your closing agent with the name of the insurance agent, their phone number, and any other contact information.) Your lender will have minimum policy amounts required for coverage. If you are interested in obtaining additional coverage, you should discuss this with your insurance agent.
If your property is located in a flood zone, then your lender will require that you obtain flood insurance. Like homeowner’s insurance, the first year’s premium is paid in full at the time of closing. If you have any questions regarding flood insurance and coverage, please contact your insurance agent. (Once you have obtained a flood insurance policy please provide your closing agent with the name of the insurance agent, their phone number, and any other contact information.)
A Power of Attorney is used when one of the parties involved in the transaction cannot be present at closing. If a Power of Attorney is going to be used it must be approved by your lender and the title company. If you know that a Power of Attorney is going to be needed, advise your closing agent as soon as possible, so that the necessary approvals can be obtained.
If you are required to bring funds to the closing, those funds must be in the form of a cashier’s check, as a personal check will not be accepted. If you would like to wire funds, please contact the processor that is handling your file, and she can provide you with wiring instructions.