The Closing is the Final Step in the Kauai Home-Buying Process
If you are buying a Kauai home, and you have received an approval and commitment letter from a lender for a home mortgage loan, then the final step required is the loan closing, which is also called the settlement.
Once the recordation takes place, then the house is yours. The seller is paid, and you get the house keys!
Until the loan closing process is complete, however, you do not have any rights to the property even though you may have already signed a purchase agreement and received loan approval.
Your rights to the property begin once the property’s legal title has been recorded and transferred to you. Before the closing may be completed all issues need to be resolved regarding financing, any contingencies, clouds on the title, and the payment of closing costs.
There are a few things to keep in mind to ensure that your home buying transaction proceeds on schedule and the loan closing goes smoothly without any surprises or delays.
Know When the Closing Will Take Place
After you have received lender approval for a home mortgage loan, then you can confirm the loan’s closing date in consultation with your Realtor, the lender and escrow. The home’s sale contract may specify an estimated date of closing but the buyer, lender and escrow need to set a firm date for the closing.
The date set for the closing needs to occur before the expiration of the loan commitment or any rate lock agreement guaranteeing the terms of the loan.
If any repairs to the property need to be made then ample time for this must also be allowed so the work may be completed prior to the close of escrow.
Preparing for the Loan Closing
When the escrow work is completed, the final walk-through takes place, and you are funded by the lender then you can sign the final escrow instructions. This is known as closing the escrow.
At this time you will provide the money for any closing costs you are responsible for, as well as any down payment money that remains to be paid.
Keep Good Records
During the Kauai home buying process make sure to document all correspondence and agreements with the parties involved including the lender. Keep good records of everything that transpires, and bring your records to the closing in case they are needed to resolve an issue.
Know Your Obligations Including All Costs
Before you arrive at the closing, all of the parties involved should have agreed in writing about who will pay all applicable closing costs and any other obligations attendant to the settlement.
Various documents may be required for closing and some are the responsibility of the seller while others are the responsibility of the buyer.
These documents may include a title insurance policy (insuring clear title) for lender (and optional owner’s policy), homeowner’s insurance, termite inspection and certification, survey or plot plan showing boundaries, easements, encroachments, etc., water and sewer certification, flood insurance (if in a flood plain), Certificate of Occupancy (for new homes), and other documentation.
These documents vary depending upon the buyer’s loan package and lender requirements as well as peculiarities of the particular property. For example there may be a private road maintenance agreement that needs to be signed.
The Final Inspection Before Closing
Prior to closing the buyer should inspect the property along with their real estate agent to make sure all property described in the contract is there (e.g., appliances), any required repairs are completed, and no damage to the property has occurred. Typically the lender will also perform an inspection just before the actual closing date.
What Happens at the Actual Loan Closing
At the closing, funds are collected and disbursed, mortgage loan documents are signed by the buyer, the seller executes the deed to the property, and the closing agent ensures that all necessary instruments are signed and recorded so that the property ownership is legally transferred.
Documents involved in the closing may include the settlement statement, Truth-in-Lending Statement, the mortgage note, and the mortgage or deed of trust that is recorded to provide public notice of the lender’s lien on the property as well as other documents.
When all of the documents have been signed and accounted for and the closing agent is satisfied that all the requirements have been fully complied with, then the buyer is given the keys to the property and becomes the owner.
For more information about buying a home on Kauai please feel free to give us a call. The Bali Hai Realty staff will be happy to help you find the perfect Kauai home and answer your questions about the Kauai home buying process.