On closing day, expect to sign a lot of documents and walk away with a big stack of papers. Here’s a list of the most important documents you should file away for future reference.
HUD-1 settlement statement. Itemizes all the costs — commissions, loan fees, points, and hazard insurance —associated with the closing. You’ll need it for income tax purposes if you paid points.
Truth in Lending statement. Summarizes the terms of your mortgage loan, including the annual percentage rate and recision period.
Mortgage and note. Spell out the legal terms of your mortgage obligation and the agreed-upon repayment terms.
Deed. Transfers ownership to you.
Affidavits. Binding statements by either party. For example, the sellers will often sign an affidavit stating that they haven’t incurred any liens.
Riders. Amendments to the sales contract that affect your rights. Example: The sellers won’t move out until two weeks after closing but will pay rent to the buyers during that period.
Insurance policies. Provide a record and proof of your coverage.
Sources: Credit Union National Association; Mortgage Bankers Association; Home-Buyer’s Guide
Brush up on these mortgage basics to help you determine the loan that will best suit your needs.
Mortgage terms. Mortgages are generally available at 15-, 20-, or 30-year terms. In general, the longer the term, the lower the monthly payment. However, you pay more interest overall if you borrow for a longer term.
Fixed or adjustable interest rates. A fixed rate allows you to lock in a low rate as long as you hold the mortgage and, in general, is usually a good choice if interest rates are low. An adjustable-rate mortgage is designed so that your loan’s interest rate will rise as market interest rates increase. ARMs usually offer a lower rate in the first years of the mortgage. ARMs also usually have a limit as to how much the interest rate can be increased and how frequently they can be raised. These types of mortgages are a good choice when fixed interest rates are high or when you expect your income to grow significantly in the coming years.
Balloon mortgages. These mortgages offer very low interest rates for a short period of time — often three to seven years. Payments usually cover only the interest so the principal owed is not reduced. However, this type of loan may be a good choice if you think you will sell your home in a few years.
Government-backed loans. These loans are sponsored by agencies such as the Federal Housing Administration or the Department of Veterans Affairs and offer special terms, including lower down payments or reduced interest rates to qualified buyers.
Slight variations in interest rates, loan amounts, and terms can significantly affect your monthly payment. For help in determining how much your monthly payment will be for various loan amounts, use Fannie Mae’s online mortgage calculators.
Garage sales can be a great way to get rid of clutter — and earn a little extra cash — before you sell your home. But make sure the timing is right. Garage sales can take on a life of their own, and it might not be the best use of your energy right before putting your home on the market. Follow these tips for a successful sale.
Don’t wait until the last minute. You don’t want to be scrambling to hold a garage sale the week before an open house. Depending on how long you’ve lived in the home and how much stuff you have to sell, planning a garage sale can demand a lot of time and energy.
Get a permit. Most municipalities will require you to obtain a special permit or license in order to hold a garage sale. The permits are often free or very inexpensive, but still require you to register with the city.
See if neighbors want to join in. You can turn your garage sale into a block-wide event and lure more shoppers if you team up with neighbors. However, a permit may be necessary for each home owner, even if it’s a group event.
Schedule the sale. Sales on Saturdays and Sundays will generate the most traffic, especially if the weather cooperates. Start the sale early, 8 a.m. or 9 a.m. is best, and be prepared for early birds.
Advertise. Place an ad in free classified papers and Web sites, and in your local newspapers. Include the dates, time, and address. Let the public know if certain types of items will be sold, such as baby clothes, furniture, or weightlifting equipment. On the day of the sale, balloons and signs with prominent arrows will help to grab the attention of passersby.
Price your goods. Lay out everything that you plan to sell, and attach prices with removable stickers. Remember, garage sales are supposed to be bargains, so try to be objective as you set prices. Assign simple prices to your goods: 50 cents, 3 for $1, $5, $10, etc.
If it’s really junk, don’t sell it. Decide what’s worth selling and what’s not. If it’s really garbage, then throw it away. Broken appliances, for example, should be tossed. (Know where a nearby electrical outlet is, in case a customer wants to make sure something works.)
Check for mistakes. Make sure that items you want to keep don’t accidentally end up in the garage sale pile.
Create an organized display. Lay out your items by category, and display neatly so customers don’t have to dig through boxes.
Stock up on bags and newspapers. People who buy many small items will appreciate a bag to carry their goods. Newspapers are handy for wrapping fragile items.
Manage your money. Make a trip to the bank to get ample change for your cashbox. Throughout the sale, keep a close eye on your cash; never leave the cashbox unattended. It’s smart to have one person who manages the money throughout the day, keeping a tally of what was purchased and for how much. Keep a calculator nearby.
Prepare for your home sale. Donate the remaining stuff or sell it to a resale shop. Now that all of your clutter is cleared out, it’s time to focus on preparing your house for a successful sale!
