Home
 Residential
Homebuyers
Guide Sealing
the Deal
Inspection
In your offer, be sure to include a contingency for an inspection.
Having a qualified professional inspect the home prior to
closing will protect you from hidden problems and costly repairs.
You may want to attend the inspection, which will take 3-5
hours, to learn more about the systems. If the inspector identifies
an area of concern, you may ask the seller to reduce the purchase
price, pay for the repairs, or fix the problem prior to closing.
Make sure the inspector you choose is a licensed contractor
or civil engineer. A good resource is the American Society
of Home Inspectors (ASHI). Members of this organization are
qualified professionals who have met a number of requirements
for membership. You can also get referrals from family, friends,
Gershman Mortgage, or a real estate professional. Inspections
generally cost in the range of $200- $500, depending on the
property's size, intended use, and location.
Appraisal
Many people confuse the inspection and the appraisal. During
an appraisal, a professional determines the home's value,
based on the current market. Gershman uses the appraisal to
determine whether to approve the loan as well as to figure
your loan-to-value ratio. The cost for an appraisal varies
depending on the size of the property and your location; generally
they range from $200-400.
Insurance
Prior to the closing, you'll need to arrange for hazard or
homeowner's insurance as well as any special insurance needed
for the property (flood, earthquake, etc). At the same time,Gershman
will arrange for title insurance and private mortgage insurance
(PMI) if it is necessary.
Homeowner's insurance (sometimes called hazard insurance)
protects the homeowner in the event of a theft, fire, and
other events. Most lenders, including Gershman, will require
you to have homeowner's insurance in place prior to the closing
and provide proof of insurance at the closing.
Title insurance protects the borrower in case there is a defect
with the title on the property that was not discovered in
the title search. There is a one-time cost, paid at closing,
associated with title insurance. PMI protects the lender in
case the borrower defaults on the loan. While, PMI payments
are included in the monthly mortgage payment, it is common
for borrowers to pay the first year's premium at closing.
Final Walk-Through
The final walk-through is your chance to make sure that the
property is in the condition agreed on in the contract. During
the walk through, confirm that any necessary repairs were
made. If the repairs were major, you may want to have the
home inspector or another professional join you to make sure
they were done properly. Schedule the inspection for after
the homeowner has moved out to ensure that nothing was damaged
in the moving process- the closer to the closing date the
better. If the house is not in the promised condition or repairs
are not satisfactory, bring it to everyone's attention as
early as possible and before the closing documents are signed.
Your real estate professional can advise you on the appropriate
steps to take for your situation. Options include negotiating
a reduction in or delaying the closing until repairs are completed.
Closing
At the closing, the borrower pays the down payment, closing
costs, and any points on the loan. The loan is disbursed and
the title is transferred to the borrower. This is also the
time to ask any remaining questions about the loan. The entire
process takes about an hour.
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