Before you can enjoy the benefits of homeownership, you’ll need to get through the closing process.
What is Closing?
Closing is the final step in the home-buying process. All the paperwork, verification, underwriting, and signatures that occur from the day your contract is signed until your closing day will be addressed and finalized, and you’ll finally become the legal owner of your new home.
Closing On An Existing Home vs. a New Construction Home
The closing process for a new construction home is similar to the process for an existing home. However, there are a few key differences to keep in mind.
To begin, with an existing home, the closing process typically happens four to six weeks after you sign the sales and purchase contract. With new construction, the closing process takes place after the home is completely built, which can take a few months up to a year. Learn more about build times here.
Another key difference when choosing a new construction home is that you, the buyer, will sign a contract with Maronda, the builder, rather than a seller. Contract details typically include the outline of the terms of the sale, the purchase price, the closing date, and any warranties or guarantees. You will be responsible for paying a deposit, which is typically a percentage of the purchase price, and we will be responsible for providing you with any necessary documentation, such as a certificate of occupancy or warranty information.
As your home is being built, you will have the opportunity to make certain selections and upgrades (vary per division), such as appliances, fixtures, and finishes. Once finalized, any additional costs will need to be paid before closing.
On the day of your closing, the process itself may take several hours. The final transactional details typically involve a title company, both the buyer and seller, any real estate agents involved, and the lender. Once all the papers are signed by all parties, the closing is officially complete, and you’ll receive the keys to your new home.
How Much Does Closing Cost?
Closing costs usually run about 3-5% of the home’s purchase price, although every build is unique and varies on your financial situation and contract terms. A breakdown of the closing costs you’re responsible for will be listed in the Closing Disclosure document your lender will send you at least three days prior to your closing date.
You can expect to pay closing costs on a variety of items, such as:
- Loan origination fees
- Credit reporting fees
- Appraisal costs
- Escrow fees
- Home inspection cost
- Prorated property taxes
What Should I Bring to My Closing?
- Photo ID (driver’s license, passport, or other government-issued ID)
- Cashier’s or certified check in the amount of the closing costs (including your down payment)
- Closing disclosure document
- Proof of homeowners insurance
- A copy of the purchase agreement
- Your real estate agent (if applicable)
When Am I Expected to Make Payments on My Mortgage Loan?
Your first mortgage payment typically falls 30 days after closing, at the start of the new month. This means that if you close on February 1st, your first mortgage payment will be due on March 1st.
What Can Delay My Closing?
Construction delays are one of the most common reasons for pushing back closing dates. Unforeseen circumstances, such as weather, material shortages, and permitting, all play a role in whether or not your build time stays on track.
Difficulties with your home inspection and appraisal, as well as financial and insurance, can also delay your closing. Keep in mind there are certain things as a buyer you should not do during the closing process as well. Learn what not to do before closing on your new construction home.
At Maronda, we understand closing is a tedious and intuitive process, that’s why our dedicated sales reps and loan officers at our preferred lender, RMC Home Mortgage, are here to guide you through the process.