For Florida home buyers, 2016 looks to be a great year to buy a new home in the Miami Dade / Broward / Palm Beach areas.
Why? Economists are predicting that mortgage interest rates will remain at “historically low levels” this year, with Freddie Mac expecting a 30 year fixed rate mortgage to average lower than 4.5%. As a result, experts are predicting even more home purchases in the coming year than in 2015.
This is great for both buyers and sellers and our local economy. From a Florida real estate lawyer’s perspective, this is a great time of year to educate and prepare these parties about the closing process. This is especially true with all of the big changes brought about under the CFPB related to closings. Buyers that fail to protect themselves are vulnerable to being victims; too many of our clients have come to us with problems that could have been negotiated and resolved before closing if they had known what to do beforehand.
Accordingly, we’ve provided a series of blog posts here to help people who are in the process of buying a new home or condo here in South Florida, including:
- Florida Home Buyer Closing Day Checklist;
- 4 Conditions A Buyer Should Require Before Closing On A Florida Home;
- Real Estate Closings: 4 Things to Know About Closing on Your New Home; and
- Florida Real Estate Closings Are Important: Checking Paperwork Details May Have Saved Florida Homeowners From Foreclosure Filing by Bank of America Eight Years Later.
Today, we are adding to our series of articles on closing information by discussing things that a Florida home buyer should do AFTER they’ve closed on their new home or oceanfront condo.
6 Things A Home Buyer Should Do After Closing
1. Take A Moment
First things first, now that you are a new home owner you should stop for a moment and congratulate yourself. It’s a big deal! Not only have you successfully navigated all of the steps to find the right house, in the right neighborhood with the assistance of the right real estate professional — you’ve also successfully obtained a home loan (in most cases) and you’ve closed on the property after dealing with all of the due diligence and bank issues (underwriting, income and asset verification, credit inquiries, inspections, appraisal, survey, title insurance, etc.). Congratulations!
2. The Closing Paperwork
As discussed in our earlier post, you will have accumulated a lot of papers and file folders over the course of buying a home, which will include the documentation that you brought with you to closing, of course. You will also have all the paperwork that was provided to you at closing (good faith estimate, bill of sale, owner’s affidavit, etc.).
As soon as possible after closing, take a minute to go through all the documentation that you received. In particular, check out the following and make sure that you have these documents and that they are accurate:
- Closing Disclosure
- Promissory Note
- Deed to the Property Showing You as Owner
- Title Insurance
If you discover a problem, then it may be important that you solve that problem immediately. Did they forget to give you the final title insurance policy? Have them send it over. Does the title insurance policy have exceptions that weren’t include in the title insurance commitment. This is a bigger issue: call a lawyer for guidance.
3. Your Address
Changing your address should be done within a short time after you’ve closed on the home. Why? Your legal residence impacts all sorts of things, like who you can vote for in the next election, and how much your car insurance premium might cost (rates may go up or down depending upon the location).
Changing your address means forwarding your mail with the United States Postal Service. It also means notifying various agencies and companies of your new home, such as:
- Your bank
- Your credit union
- Your investment adviser or stock brokerage
- Social Security Administration
- Your credit card companies
- Your insurance agent (auto, boat, home, fire, etc.)
- Your driver’s license record with the DMV (go here to do this online with the Florida Department of Highway Safety and Motor Vehicles)
- Your car license plate tags with the DMV (go here to do this online with the Florida Department of Highway Safety and Motor Vehicles)
- Your phone company (landline, cell).
4. Monthly Budget
Buying a new house means that you are going to need to buy some new things. These may be minor, one time expenses, like a new lock for the backyard gate or a couple of new trash cans. It can also mean that you’ll be spending lots of cash on things like draperies, blinds, security systems, and new kitchen appliances.
There may be other expenses that will increase as part of your monthly, ongoing expenses. Sit down as soon as possible after closing and make sure you’re ready for things like:
- New monthly HOA fees (for the Homeowners’ Association)
- New monthly Condo Association fees if you have purchased a condo
- Saving for Upcoming Property Taxes (if they aren’t part of your escrowed account)
- Homeowners’ Insurance Premium (if it’s not covered in your escrowed account)
- Emergency Fund for surprise repairs and expenditures that your new home may need (like the garage door opener that fails three months down the road, for instance)
- Fund to cover any increase in your HOA or Condo Association fees or special assesments (because over time, they likely will be increased to cover increased maintenance costs, etc.).
5. Your Homeowner’s Insurance Policy
When you buy a new home, you will get new insurance coverage to protect you from unexpected loss. Here in South Florida, most home buyers are aware that they need to protect against the risk of water-related damage like mold or flooding from hurricanes.
However, shortly after closing it’s a good idea to review your policy and double check that you’re covered for all the risks that you feel are necessary. Also, there may be ways to get a lower premium if you do certain things.
So, read the policy for things like:
- Adequate flood coverage
- Hurricane coverage
- Mold coverage
- Discounts for smoke alarms
- Discounts for security systems
- Riders for expensive personal property (engagement rings or artwork).
6. Your Monthly Mortgage Payment
Read over your mortgage documents again. Make sure you know when your first payment is due and know how many days after the due date that you can make a payment before you have to pay a late fee. Look to see if there is a pre-payment penalty, just in case you decide to make extra payments.
Also, check to see if it is likely that your loan servicer is going to change. Will you be sending payments to a different address than that set forth in your disclosure statement?
After you buy a new home, the deed is recorded in the Florida real estate property records. Each county clerk is responsible for keeping these public land records up to date and accurate. Since they are public records, lots of companies like to scour these records so they can sell new home owners all sorts of products and services.
Some of these things do not involve a lot of money. Cable or satellite TV service companies may offer new home offers special discounts, and these may be great deals with real savings, for example.
However, there are other marketers that new Florida home owners need to be careful about and investigate before doing business with them. These include:
- Offers for home equity lines of credit
- Offers for new credit cards
- Offers for home improvements (a swimming pool, for instance, or a new deck, energy-saving windows, etc.)
- Offers for “mortgage protection (life) insurance” (these policies usually cost more and a standard life insurance policy can accomplish the same thing)
Offer for a bi-weekly payment plan on your home loan (key here: you can do this yourself, you don’t need to pay someone to do this for you!).
What Happens If You Have Trouble After Closing?
If you find that you are having physical problems with your new home, including roof leaks and plumbing issues, or if you are finding it hard to make your mortgage payments after you’ve bought your home — either six months down the road or six years — then it’s important that you don’t get overwhelmed by the situation and do nothing. That’s going to increase your stress as well as make the situation worse.
You have options. If the problems relate to the condition of the property, the first things to do is to review the seller disclosure statement you received when you signed the contract to purchase the property to see if the problem was disclosed (and the inspection report). If the issue relates to affordability, negotiating with your lender on ways to work things out and avoid foreclosure is possible, especially now that new laws and regulations are in place in the aftermath of the recent Foreclosure Fraud scandal.
Either way, a good piece of advice is to at least speak with an experienced Florida real estate lawyer to learn about your rights. The good news is, that most real estate lawyers, like Larry Tolchinsky, offer a free initial consultation (over the phone or in person, whichever you prefer) to answer your questions.
Do you have questions or comments? Then please feel free to send Larry an email or call him now at (954) 458-8655.
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