CHAPTER 10 The Closing Process and Mor ocess and More
Deciding to buy a house brings many challenges, especially for those unfamiliar with the intricacies of a real estate purchase, transfer, and financing. This section is a brief, user-friendly guide to help you find your way through the issues of insurance, warranties, appraisals, and pre-paying your mortgage if you choose to. In this section, we also present “10 Things to Know if You’re Closing a Home Deal for the First Time,” which offers some of the best tips to follow to avoid letting things get out of hand.
HOMEOWNER'S INS WNER'S INSURANCE: MAKE SURE YOU'RE COVERED! VERED!
Unless you’re paying the sale price of the home all in cash, your lender will require you to purchase homeowner’s insurance before closing that takes effect on the day of closing. After the contract to purchase is accepted by all parties, but before closing and the title has been transferred to you, the seller must ensure the home has adequate insurance coverage on the
structure and the property. Immediately on closing the sale and when title transfers, the seller no longer has an insurable interest in the property, hence the seller’s coverage ceases. The new owner (buyer) must have homeowner’s insurance coverage in place. Whether you get a mortgage or not, you should always insure your home and have it covered on the day you close the transaction. 124
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