How to Prepare for Closing Day: 4 Tips for California Home Buyers

California home buyers tend to have a lot of questions about the real estate closing process. This is especially true for first-time buyers who have never been through it before.

In a previous article, we outlined the basic steps in the closing process for California home buyers. Today, we’ll talk about some of the things you can do to prepare for closing day. This information will be useful for first-time and repeat buyers alike.

How to Prepare for Your Closing Day

In a home-buying context, the term “closing” refers to the final steps that complete the sale of the home. It’s when all of the “loan docs” and other paperwork are finalized and signed by the home buyer. After that, the deed (or record of ownership) will officially transfer from the seller to the buyer.

But what happens in the days and weeks leading up to the closing? What can California home buyers do to prepare for closing day, and to prevent unwanted surprises? Here are some steps to take.

1. Start saving money.

It’s never too early to start saving up for your closing costs. In fact, there’s no better time than the present. This is one of the best ways to prepare for closing day. In California, most home buyers end up accumulating various charges and fees that must be paid when they close. These are collectively referred to as closing costs, and they can add up to thousands of dollars. So the sooner you start saving up for this expense, the better.

2. Avoid major financial changes. 

Many home buyers in California start off by getting pre-approved for a mortgage loan. Then they start house hunting, make an offer, and eventually go into “escrow.” During this time, it’s best to keep your financial situation as stable as possible. It’s probably not the time to open new credit card accounts, or make a large bank withdrawal. These things could create additional paperwork and might even affect your mortgage qualification status. The status quo is generally best at this stage — at least until you’ve successfully closed on your new home.

3. Handle any paperwork requests that arise.

During the loan review and underwriting stage, you might be asked for additional documents or information. For example, an underwriter might request a letter of explanation about a certain bank transaction, or other documents. Handling such requests promptly can help keep the closing process on track, which is something that everyone wants.

4. Review your finalized list of costs. 

As part of the closing process in California, home buyers typically receive a finalized list of costs that must be paid in order to close. Carefully review this document when you receive it. The finalized figure will be the actual amount you bring to the closing (usually in the form of a cashier’s check).

Closing day procedures can vary slightly from one borrower to the next, because there are so many variables involved. So portions of this article might not apply to your particular situation. But if you keep these tips in mind, you’ll be better prepared for your closing process.