An appraisal is an estimate of the value of the property as determined by a licensed professional appraiser. The appraisal is ordered by the lender (after home inspections if you've elected to have any inspections), and is paid for you by you. It is added into your closing costs and will be paid at settlement.
The goal of the appraisal is to verify the value of the property for the lender, and to protect you from overpaying. The contract is contingent upon whether the appraisal comes in at or above the purchase price. If the appraisal comes back short, we will have to negotiate with the sellers.
You have 5 days from the date of the contract execution to begin the mortgage loan application. During the 30-45 days before closing, the lender will be finalizing your mortgage. It is very important not to make any major job changes, major purchases, or open new credit cards or lines of credit, as any of these activities could alter your qualifications for a loan.
Your lender will require you to obtain a homeowner's insurance policy. You will need to provide the lender with your policy information prior to closing. It's always a good idea to check with the company with which you have your current car and/or home insurance policy. You should get a decent discount if you bundle your car & homeowner insurances with the same company.
TITLE + SETTLEMENT ATTORNEY
In Delaware, all real estate settlements for real property must be performed by a Delaware licensed attorney. It is the buyer's responsibility to select an attorney to handle all of the preparations for settlement. The settlement attorney will conduct a title search to ensure the property is legitimate, and to find out if there are any outstanding mortgages, liens, judgements, restrictions, easements, leases, unpaid taxes or any other restrictions that would impact your ability to take ownership of the property.
Once the title is found to be "clear", the attorney will issue a title insurance policy which protects lenders or owners against claims or legal fees that may arise throughout ownership of the property. This is required when obtaining a mortgage, and is highly recommend even if you are paying cash. This will be part of your closing costs, and the fees are state regulated—every title company will charge the same amount for title insurance, making it easier for you because you don't need to "shop around"! Lastly, the settlement attorney is also responsible for making sure the deed and mortgage are recorded in the land records.
"CLEAR TO CLOSE"
The best words to hear from your lender! This means the mortgage underwriter has officially approved all documentation required to fund the loan. This is your last step before settlement!