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8 Things to do Before Closing on a House





We are just about to close on our new house and we've come across many things that should be completed before closing.

Here are 8 things to do before closing on a house: 

  1. Get your New Mortgage Ready.  After you've shopped around for the best rate, meet with your mortgage rep to sign off on the papers and to determine your payment details. 
  2. Prepare for the Lawyer.  Call your lawyer to make an appointment for closing day.  Get the lawyer to run through the numbers with you again so that you know exactly how much you should bring for your down payment/lawyers/closing fees.
  3. Prepare your Down Payment Funds. If you have your down payment funds in a high interest savings account, make sure that it's accessible for a bank draft to be submitted to the lawyer.  Since I use PC Financial, I have to wait 1 day for my funds to be transferred over.  If your savings account has this type of transfer delay, make sure you account for this.
  4. Get the Utilities Ready.  Call the Cable/Telephone/Security company a week before closing to setup TV/Internet/Phone/Alarm.  Sometimes the cable company will have to run new wires into your house which can be delayed if the installers are busy.  If you call them early, they can hopefully show up and do the install near closing.
  5. Get your New Furniture/Appliances ready.  If you purchased new appliances/furniture arrange for the store to deliver the packages on (or just after) closing day.
  6. Get Home Insurance.  Some mortgages (if not all) require that you have home insurance.  Call around a few weeks before closing to see who has the best rates and coverage.  If you are a professional, no one can beat Meloche Monnex (that I've found).
  7. Get Life Insurance.  With my first house, I simply signed on with the mortgage life insurance because it was cheap and required no qualification.  However, if I did more research, I should have realized that the benefits decrease while the premiums/payments remain the same.  Do yourself a favour and get term life insurance instead.
  8. Prepare for the Move.  If you are hiring movers, call them a couple weeks in advance to book your time.  If you are moving yourself, call the truck rental place (and your strong buddies) at least a week in advance.

There you have it.  A list that I will be using for my closing that is coming up soon.   Am I forgetting anything?

Photo credit: Rberteig 





26 Comments, Comment or Ping

  1. 1. Rene

    Nice summary,

    A couple other things that could be applicable:

    1 – renovations, if you are getting a contractor to do some work, make sure you have that lined up. Well prior to closing you can arrange a visit so that you can develop a plan and get estimates for potential renovations.

    2 – Change addresses. I keep a list of tall of the cards, bills, and companies that need my address. Auto-forwarding can be set up with Canada Post

  2. 2. George

    Here’s another one: budget to have about $500 cash in your pocket on moving day or shortly thereafter, for “misc stuff”. There will always be things you forget to pack/buy, it helps to have cash on hand to buy beer or pizza (or both!) for friends who help move, and it’s good to have ready cash for any weird emergencies that happen immediately after moving in.

    If you don’t need it, it can just go back in the bank, but it’s really handy to have. Just because a house is brand new, doesn’t mean it won’t have problems…

  3. With regards to the life insurance on your house (bank insurance vs term life)
    The bank does offer life AND disability for little to nothing. While I agree with you it is in your benefit to get term life, if you are looking to have disability included, you can’t do much better then the bank life and disability.

  4. Stephen, I wouldn’t say that the cost is little to nothing. My quotes were around $30/month/$100k insured. If regular income is something that would be catastrophic if lost, there should be separate disability insurance which should cover all your expenses in case of the worst happening.

  5. I guess what I was trying to say was that IF you needed disability comparing what you get on the mortgage versus on your own, the cost per month at the bank is much cheaper. Similarly to group life/disability versus self employed life/disability.

  6. I just signed on for the mortgage life insurance @$28/mth. Would love to hear the case for term life insurance though. Looking forward to that post.

  7. 7. Ramis

    Term insurance almost always the best option to insure your mortgage, although it might cost you a little more.

    Bank:

    - Underwriting will be done AFTER death, which could mean you dont get any kind of payment.

    - The bank is the irrevocable beneficiary, in which case your family will not be able to use any of the funds for other purposes, if needed.

    - Cost will increase over time, with term plan you are guaranteed the premium for the term length and guaranteed a renewal premium.

    - If you decide to switch your mortgage you will not be able to transfer your insurance and will have to apply again.

    If you have a financial planner he/she can put together a combination of term plan that will cost you less and cover your obligations.

  8. 8. Hadley

    The main benefits of level term life insurance instead of mortgage life insurance include the following:

    1. Level term provides rates that are guaranteed to remain the same.
    2. Coverage limites remain the same throughout the term of your policy.
    3. Your beneficiary, not the mortgage company, receives the proceeds from the level term life insurance policy.
    4. Your beneficiaries can use the money as they see fit.

  9. I will toss this out idea out for what it is worth. I highly suggest you don’t book anything for closing day. Why? Because you might not get into your house on time. For example, in my first house the owner forgot to drop off the key to the real estate agent when he signed the papers (he lives two hours from town) so I had to wait a total of five extra house to pick up the key to my house on closing day.

    Good thing I wasn’t doing anything until the next day with the new house!

    Tim

  10. I’ll second Tim on that one – you just don’t know when you will get the keys to the new place.

    Another thing is confirm any truck rentals – I know someone who’s reservation ‘got lost’ and they really had to scramble on moving day because it was the end of the month.

    Also – last time I moved I rented a truck from a cheapo place that only had one truck and the people who had it out, didn’t bring it back so I had no truck and the company couldn’t help me. I think if you rent from a bigger company and this happens, they will be in a better situation to get a truck for you.

    I have another friend who rented from Uhaul and the truck kept breaking down during the day which really messed things up for him.

    Moral of the story – don’t try to save too much $$ on the truck rental!

    Mike

  11. @MoneyMusing: I’d advise you to check CBC’s Marketplace regarding life insurance.

    FT, If you don’t mind I have something to say before the closing date:

    - Once you get the keys go to the house and check if everything works fine. In my case the dryer was not working. Also, during the home inspection (in case is a home) check for the serial numbers. Some people replace the fridge, drywer, washing machine, etc. When you have an agreement they looks fine. However, when you get the keys, they’ve been replaced.

    - Another one is Title Insurance. Some lawyers give you a quote (sometimes it is cheap). However they don’t include copies, calls, etc and you have to pay for those fees also. I’ve used the First Canadian Title. You pay one fee and everything is included.

  12. 12. The Reverend

    I have a question. Do you NEED to get life insurance? Obviously there are a ton of situations where you would want to have enough coverage to pay off your mortgage if something happened to lighten the load on your dependents, but what if you don’t have dependents?

    Its just my wife and I. We’ve got a bit of equity in our house. She wouldn’t need all the space if something happened so couldn’t she just sell if that were the case?

    Even better than just term would be decreasing term if you can arrange it (not really sure what’s out there). As the balance goes down with your mortgage balance, so would your premiums. I know this is available with some HELOC products. Also, comparing rates is only meaningful if you’re same age/health.

    Manulife One offers a declining balance life product:

    http://www.manulife.ca/canada/mBank.nsf/Public/mone_ci_life_details

  13. Life insurance is to protect your dependents in the worst case scenario… when your income stream dries up. If you were to pass, would your children have enough to survive? How about your spouse, does she depend on you for income?

    I will be writing more about this tomorrow.

  14. 14. The Reverend

    I was referring strictly to insurance to cover the mortgage. If I’m young enough that my wife doesn’t depend on my income, assuming she’d sell the house and downsize.

    I guess what I’m getting at is there any legal requirement to have life coverage sufficient to pay off the mortgage? Not that I know of but I could be wrong.

  15. Reverend, no, there isn’t a legal need to cover the mortgage. If a dependent inherits the mortgage upon death, and they can’t pay for it (or sell it for some reason), the home would be foreclosed on by the lender.

  16. 1. conduct the final walk-thru/inspection

    always assume your escrow will close 2-3 days late. I’ve never had an escrow close on time (and I’ve bought over a dozen homes).

  17. Very useful points. There are planty of manuals and tips what should be done before you buy a house and that is good because it is nothing better than negotiation with well-informed customer. Nowadays it is much more easier to get all important information especially thanks to the many blogs where people are sharing their own experiences.Working as a Toronto realtors I have also prepared some guides and I hope that they are helpful at least in a same way like your points.

  18. 21. NinTo

    we have found our first home, made an offer, got it inspected, laid down some conditions which the seller has agreed to do etc.. closing is a month away and we are to visit the property a week or two before closing.

    What if we find upon that visit that since signing the offer they have not kept the place well – ie stained carpet, marks on wall etc (which did not exist when we first saw the house and agreed to purchase)? what’s our recourse before closing? can we walk away if we wanted to?

  19. NinTo, from my experience, the house is subject to final inspection and it should be in the same condition as when you viewed it last. If there is significant damage during the final inspection, you should bring it up with your agent/lawyer and they’ll take care of the details.

  20. 23. Xeno

    I truly think some things should be looked at always…

    in my exp was that the realtor’s on both occasions walked away from the deal as soon as the offer was accepted which is pretty upsetting as it clearly showed most realtors are trying to make their money and get out as quickly as possible.

    - Always find your own home inspector as there is a MAJOR conflict of interest using the person your realtor is recommending.

    - Always call the utilities company to verify if the work has been completed no matter if your lawyer is doing it or not. This assures that all the meters are read on the day of closing.

    - Check with your lawyer on the key transfer on how will they be occuring as some realtors will allow you to use a lockbox and some will tell you that it is not possible which is a total lie.

    - Have an inspection a day or two before closing to inspect everything in the house and have a conversation with the previous owners on arrangement of mail, inside keys, and contact information just in case you need it.

    - Rent a truck from a good place like national cause if you do the math overall you save money cause they give you like 100km per day where as in the 20$ uhaul rentals charge you like .49 cents/KM which is ridiculous amount.

  21. 24. MeName

    Never pay to Canada Post for forwarding of your mail. $100+ dollars and they still won’t forward a s***t. Disgrace! Your best bet is to get in touch with new owners for your old place and make an verbal agreement with them. Most people will let you know when your mail arrives first couple of months. After that everyone should already be notified of your address change by then, so you should be OK.

  22. MeName – we had Canada post forward our mail without any problems. Did you phone them about the issue?

  23. 26. Jess

    #9: BREATHE. Once you’ve secured financing and done all of the above things, take a deep breath and revel in the excitement of owning a new home!

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