Closing Day Insights: 8 Mistakes to Avoid as a Homebuyer

Aug 04, 2023

Buying a home is an exciting and rewarding experience. After months of searching, negotiating, and paperwork, the day has finally arrived – closing day. This is the day when you officially become the owner of your new home. However, it's important to approach closing day with caution and avoid making common mistakes that can derail the process or cost you money.

1. Not reviewing the closing documents

One of the biggest mistakes you can make as a homebuyer is not thoroughly reviewing the closing documents. These documents outline the terms of the loan, the purchase agreement, and other important details. Take the time to carefully read through each document and ask questions if something is unclear.

2. Failing to conduct a final walkthrough

Before closing, it's essential to conduct a final walkthrough of the property. This allows you to ensure that the property is in the same condition as when you made the offer and to address any issues that may have arisen since the inspection. Don't skip this step, as it can help you avoid surprises on closing day.

final walkthrough homebuyer

3. Not securing homeowner's insurance

Securing homeowner's insurance is a crucial step in the homebuying process. Without insurance, you won't be able to close on the property. Make sure to shop around for the best rates and coverage before closing day and have proof of insurance ready to present.

homeowner's insurance policy

4. Making major financial changes before closing

It's important to maintain financial stability throughout the homebuying process. Avoid making major financial changes, such as opening new credit accounts or making large purchases, as this can impact your credit score and loan approval. Wait until after closing day to make any significant financial moves.

financial stability homebuyer

5. Not bringing the necessary funds

Closing costs can add up quickly, and it's essential to come prepared with the necessary funds. Review the closing disclosure statement beforehand to understand the amount you need to bring to the closing table. Failing to bring the required funds can delay the closing or even lead to the cancellation of the transaction.

homebuyer bringing funds

6. Neglecting to review the settlement statement

The settlement statement, also known as the HUD-1 or Closing Disclosure, provides a detailed breakdown of the closing costs. Review this document carefully to ensure that all fees and charges are accurate. If you notice any discrepancies, address them with your lender or closing agent before signing.

settlement statement homebuyer

7. Not getting a final loan approval

Before closing, it's important to obtain a final loan approval from your lender. This ensures that your financing is secure and that there are no last-minute surprises. Failure to obtain final loan approval can result in the cancellation of the transaction, so make sure to stay in close communication with your lender throughout the process.

final loan approval homebuyer

8. Rushing through the closing process

Closing day can be overwhelming, but it's crucial to take your time and carefully review each document before signing. Don't rush through the process just to get it over with. Take the time to understand what you're signing and ask questions if something is unclear. This is your opportunity to ensure that everything is in order before officially becoming a homeowner.

homebuyer signing documents

Avoiding these common mistakes can help ensure a smoother closing process and a successful home purchase. Take the time to educate yourself about the process, ask questions, and seek guidance from professionals along the way. By doing so, you'll be well-prepared for closing day and ready to embark on your new homeownership journey.