Mr Murray, Question about timing

[Kay]

Mr Murray,

My husband and I have purchased a 2005 Patriot and I'm a little confused about when things have to be done. We're doing a home-only loan and have signed a purchase agreement, secured financing, and paid our down payment.

Our dealer says that we will be closing in about a week and at that time we have to have proof of 1 year's insurance on the home. However, the house is still being built and won't be set up until sometime around Christmas.

I talked to Foremost Insurance and they said that we can't get insurance until the home is set up. I asked the dealer about this and he gave me a confusing answer about a final closing and phone audit from the mortgage company after the house is on our land and set up. He still didn't explain to me how I can get insurance on a house that isn't finished yet. He did say that we don't need trip insurance because their lot insurance covers the home until it's set up.

Can you clarify this for me?

[rmurray]

It is very rare to close a home only contract until the home is built...delivered to the dealer and inspected by the buyer..Home only closings can be done with very short notice and there is no good reason for you to close this early...

This way you can be sure the home is what you ordered...and it is in good shape...On home only loans...1st payments come due with in 45 days of the closing...not the delivery...with the plan your dealer has..you may very well have a payment before you move in..

In all cases they will need insurance right at closing..It is not unusual for a binder to be had at this time just prior to closing...and Foremost does do this...

Remember with some home only loans..the dealer gets all of his money with in days of the closing...Some lenders require a customer interview prior to closing...but not all do...

I would suggest the closing wait until the home is on the dealer lot...Ask him and see what he says..

[Kay]

Thanks Mr Murray,

You've made things very clear. I like our dealer and have no doubts about his honesty, but sometimes, the more he talks, the more confused I get!!

Now that you've explained it, I think what he was trying to tell me is that our house will be finished in a week or so, and they want to do the closing, but they have two other houses scheduled for December, so it may take a while to get ours set up. Believe me, he didn't say it that coherently!!!

Our current home is paid for, so making payments on the new home before we move in wouldn't be a hardship.

Our dealer quoted insurance for us from Sunbelt Insurance, but we can get better coverage for the same money with our AARP discount through Foremost. I think I'm going to ask him to talk to Foremost for us and get the binder when he needs it. That would be one less thing for me to worry about.

Thanks again for your help,
Kay

[rmurray]

Good Luck with your new home...