What not to do when closing a home + closing terms to know

Congratulations! You're under contract on a home! On this show Robert and Dave talk about what not to do when you're closing a home. They also take on all those confusing terms and acronyms that you'll hear throughout closing. This show is a great listen for any homebuyer!

What Not to do when closing a home:

  1. Make any big financial purchases or changes
  2. Obtain a car lease
  3. Switch jobs last minute
  4. Have poor communication with your lender
  5. Fail to communicate with your lender about large gifts from family or withdrawals from your IRA for a down payment

Closing terms to know:

  • COE: "Close of Escrow"--the day you offically become a homeowner.
  • EMD: "Earnest Money Deposit"--the funds the buyers put down to prove to the sellers they are making a serious offer.
  • Contingencies: Certain criteria that must be met before closing on the home. If they are not met, a buyer may back out of the deal without losing their EMD.
  • Title Insurance: Offers protection against any unexpected competing claims on the home.
  • CD: "Closing Disclosure"--a document the buyer is required to receive three days perform closing. It summarizes the buyer's loan terms and all fees the buyer needs to bring to closing.
  • Cash to Close: The total amount the buyer needs to bring to closing to seal the deal.
  • Prorations: When certain fees and taxes are divided between the buyers and sellers, like property taxes. 
  • Credits: These add wiggle room to closing costs to help cash-strapped home buyers seal the deal.

SOURCE: Realtor.com