CHAPTER 10 The Closing Process
Deciding to buy a house brings many challenges, especially so for those unfamiliar with the intricacies of real estate purchase, transfer and financing. This section is a brief, user-friendly guide to help you find your way through the issues of property insurance, warranty, appraisal and mortgage statement on the property purchase. 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 in order to avoid letting things get out of hand or off the purchase timeline.
HOMEOWNER'S INS WNER'S INSURANCE: MAKE SURE YOU'RE COVERED! VERED!
Unless you’re paying the sale price of the home in cash, your lender will require the purchase of homeowner’s insurance before closing. After the agreement to purchase is accepted, but before closing and title has transferred. I recommend 10 days or less into the transaction shop for home insurance. It’s the seller’s obligation to ensure appropriate insurance coverage on the house and property for home to be insured. Immediately on closing the sale and when title transfers, the seller no longer has an insurable interest in the property, hence seller’s coverage ceases. You as the new owner must have homeowner’s insurance coverage in place. In most cases, you’ll be asked to provide proof that you’ve prepaid one year’s worth of coverage before the lender will set a closing date. The lender holds a lien on the property until the mortgage has been paid off. To safeguard their interest, lenders want financial protection in the form of a home insurance policy to pay for the cost of rebuilding your home, should disaster occur. 76
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