closing Archives - Page 14 of 15

Terms You Hear at a Closing

There are many factors to consider when buying a home. When it comes to the closing process, it is a good idea to know the terminology that will be discussed. This can help make the situation much more comfortable and professional for all parties involved. Below are some of the terms that may be discussed during the closing process.

ANNUAL PERCENTAGE RATE (APR) This term reflects the cost of all credit and finances as determined by the length of a year, including the interest rate, points, broker fees, and other credit charges obligated to the buyer. Simply put: this is the price you pay to borrow the money to buy the home. There will either be a fixed APR or a variable APR. A fixed APR means the APR doesn’t change based on an index during the life of the loan. Because of this, fixed APRs can be more predictable when it comes to budgeting.

PRIVATE MORTGAGE INSURANCE (PMI) This term is insurance coverage that homeowners are required to have if they’re putting down less than 20% of the home’s cost. Basically, PMI gives mortgage lenders some backup if a house falls into foreclosure because the homeowner couldn’t make their monthly mortgage payments. The charge is usually included in the monthly mortgage payment in an attempt to protect the lender from a possible default.

DOWN PAYMENT Like many transactions involving large sums of money, the mortgage process involves a down payment – the amount a home buyer pays in order to make up the difference between the purchase price and the mortgage amount. Some experts advise no less than 10% to 15%. However, any amount over 20% of the purchase price is often recommended, and may be required to avoid having to pay for private mortgage insurance.

LOAN ESTIMATE (LE) The Consumer Financial Protection Bureau, or CFPB, requires your lender to issue a Loan Estimate within three business days of receiving your mortgage application. All relevant loan data, including estimated monthly payments, the cost of interest and your interest rate are included. You can also review other costs associated with the loan, such as recurring taxes, one-time costs, fixed fees and negotiable fees.

It is important to note the loan estimate is designed to provide the potential terms of your loan. Lenders will request additional financial data from you to complete the loan documents. However, the ability to change terms is limited, particularly in certain cost categories.

CLOSING COSTS This term refers to the expenses, over and above the price of the property, that buyers and sellers normally incur to complete a real estate transaction. Closing costs may also be referred to as transaction costs or settlement costs and may include various fees and charges associated with finalization. These may include or be related to application fees, title examination, title insurance, property fees, as well as settlement documents and attorney charges.

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Preparing to Sell Your Home

Prepare your home for maximum earnings. There are simple steps you can take to maximize your home’s appeal.
Enlist the help of a Realtor to market and sell your home. When selling your home, a Realtor can provide expertise in valuing and advertising your home, qualifying and screening potential buyers, and negotiating contracts. If you are not able to enlist help from a Realtor, Title First can provide you with assistance.
Negotiate a contract. When you receive an offer for the purchase of your home, it must be in writing, generally on a preprinted real estate purchase contract from your local bar association or board of Realtors. You may modify or alter the offer in any way you, your Realtor, or your attorney wish. Offers and counteroffers are made until the terms of the contract have been fully agreed to by all parties. When assessing offers and making counter-offers to the seller, don’t feel pressured to accept less than the value of your home.
Close on the property. Before your home is officially sold, you must sign all appropriate documentation at your closing. The closing will typically be held at a Title First office, the office of your realtor, lender or attorney, or sometimes on-location. Because your home represents one of the most significant investments you will make throughout your life, it is important that you feel comfortable with all the information being presented to you during the closing procedure. Title First is dedicated to walking you through this important process with care and attention. When it’s time to set up your closing, don’t hesitate to tell your realtor or lender to call Title First, or feel free to give us a call if you’re working by yourself.

Be prepared for these seller’s fees commonly seen at the closing.
Fees:
Current loan payoff
Conveyance fee
Title insurance examination
Title insurance commitment/premium for the owner policy
Documentation to provide your Realtor® with:
Tax receipts
Utility bills
Mortgage Payment
Information to provide to Title First:
Your mortgage company name, address and account number
Any existing title insurance policy

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CLOSING TIME: 6 STEPS EVERY HOMEOWNER SHOULD EXPECT

Get owner’s title insurance and buy your home with confidence
Your long home-buying journey is almost over. You found the home you love, the seller agreed to your offer and now it’s time for closing. Of course, there’s a lot to think about right now, and the last thing you want is something to go wrong. So make sure you work with an experienced closing agent to help ensure the details come together and everything runs smoothly.

As soon as the seller accepts your offer, the behind-the-scenes work begins. You can expect closing to happen within 30 to 90 days.

Select a Closing Agent: If you are working with a real estate agent, with your permission, he or she may place an order with a closing agent as soon as your sales contract is accepted. The closing agent can be a title company, an escrow company or a settlement company. Most homebuyers rely on their real estate agents to select a closing agent – someone they work with regularly and know to be professional, reliable and efficient. However, you can choose your own closing agent if you wish. The closing agent will oversee the closing process and make sure everything happens in the right order and on time, without unnecessary delays or glitches.
Draw up an Escrow Agreement: First, a contract or escrow agreement is drafted, which the closing agent reviews for completeness and accuracy. The agent will also put your deposit into an escrow account, where the funds will remain until closing.
Title Search is Conducted: Once the title order is placed, the title company conducts a search of the public records. This should identify any issues with the title such as liens against the property, utility easements, and so on. If a problem is discovered, most often the title professional will take care of it without you even knowing about it. After the title search is complete, the title company can provide a title insurance policy.
Shop for Title Insurance: There are two kinds of title insurance coverage: a Lender’s policy, which covers the lender for the amount of the mortgage loan; and an Owner’s policy, which covers the homebuyer for the amount of the purchase price. If you are obtaining a loan, the bank or lender will typically require that you purchase a Lender’s policy. However, it only protects the lender. It is always recommended that you obtain an Owner’s policy to protect your investment. The party that pays for the Owner’s policy varies from state to state, so ask your settlement agent for guidance. before closing.
Obtain a Closing Disclosure: Your lender must provide a Closing Disclosure to you at least three days prior to closing. Your lender may also have a closing agent provide the Closing Disclosure to you three days before you close your transaction. If your lender makes certain significant changes between the time the Closing Disclosure form is given to you and the closing, you must be provided a new form and an additional three-business-day waiting period after the receipt of the new form. This applies if the creditor: 1: Makes changes to the APR above 1/8 of a percent for most loans (and 1/4 of a percent for loans with irregular payments or periods) 2. Changes the loan product 3. Adds a prepayment penalty to the loan. If the changes are less significant, they can be disclosed on a revised Closing Disclosure form provided to you at or before closing, without delaying the closing.
The Finish Line: Prepare for Closing: As closing day approaches, the closing agent orders any updated information that may be required. Once the closing agent confirms with the lender and the seller, he or she will set a final date, time and location of the closing. On closing day, all of the behind-the-scenes work is complete. While you’ve been busy packing, ordering utilities and coordinating the movers, your closing agent has been managing the closing process so that you can rest assured, knowing all the paperwork is in order.

More Homebuyer Tips & Information
The American Land Title Association helps educate homebuyers like you about title insurance so you can protect your property rights. Check out Title First Agency to learn more about title insurance and the home closing process.

This advertising offers a brief description of insurance coverages, products and services and is meant for informational purposes only. Actual coverages may vary by state, company or locality. You may not be eligible for all of the insurance products, coverages or services described in this advertising. For exact terms, conditions, exclusions, and limitations, please contact a title insurance company authorized to do business in your location.

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Title Problems As a Property Buyer

Are you questioning whether you really need title insurance when you buy your home? Every home and piece of land has a history and with a good and thorough title search, you can unpack any issues that could be tied to your purchase. Having title insurance assures you that even after you close on your property, you are protected from any title problems that may arise in the future. What issues?

PUBLIC RECORDS: Mistakes and errors happen but you do not want it affecting your home. The errors can be disastrous and cause you an undue financial burden to resolve. Simple clerical or filing errors could affect the deed or survey of your property.

UNKNOWN LIENS: Prior owners of your property may have left unpaid bills. And, even though the former debt is not your own, banks or other financing companies can place liens on your property for unpaid debts even after you have closed on the sale. This is an especially worrisome issue with distressed properties.

ILLEGAL DEEDS: While the chain of title on your property may appear perfectly sound, it’s possible that a prior deed was made by an undocumented immigrant, a minor, a person of unsound mind, or one who is reported single but in actuality married. These instances may affect the enforceability of prior deeds, affecting prior (and possibly present) ownership.

MISSING HEIRS: When a person dies, the ownership of their home may fall to their heirs or those named within their will. However, those heirs are sometimes missing or unknown at the time of death. Other times, family members may contest the will for their own property rights. These scenarios – which can happen long after you have purchased the property – may affect your rights to the property.

FORGERIES: Unfortunately, we don’t live in a completely honest world. Sometimes forged or fabricated documents that affect property ownership are filed within public records, obscuring the rightful ownership of the property. Once these forgeries come to light, your rights to your home may be in jeopardy.

UNDISCOVERED ENCUMBRANCES: At the time that you purchase your home, you may not know that a third party holds a claim to all or part of your property – due to a former mortgage or lien, or non-financial claims, like restrictions or covenants limiting the use of your property.

UNKNOWN EASEMENTS: You may own your new home and its surrounding land, but an unknown easement may prohibit you from using it as you’d like or could allow government agencies, businesses, or other parties access to all or portions of your property. While usually non-financial issues, easements can still affect your right to enjoy your property.

BOUNDARY/SURVEY DISPUTES: You may have seen several surveys of your property prior to purchasing, however, other surveys may exist that show differing boundaries. Therefore, a neighbor or other party may be able to claim ownership to a portion of your property.

UNDISCOVERED WILL: When a property owner dies with no apparent will or heir, the state may sell his or her assets, including the home. When you purchase such a home, you assume your rights as the owner. However, even years later, the deceased owner’s will may come to light and your rights to the property may be seriously jeopardized.

THE BOTTOM LINE: A title insurance policy will be your best protection against those and many other title problems that may become known after you close on your transaction. Title First Agency is proud to be one of the few SSAE 18 certified title agencies in the nation. After you close on your new home, we record the deed and the mortgage at the courthouse (returning the original recorded deed to the new owner and the mortgage to the lender) and prepare the owner’s and lender’s title policies. Following the recording of the deed and mortgage, the buyer will receive (via the mail) the original recorded deed and the original title insurance policy, if applicable. It is wise to keep all of these documents in a safe place.

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Title Search Company for Buyers and Sellers

The experts at Title First oversee and perform thousands of closings each year. When using Title First, you can sign confidently on the dotted line knowing that all details of your title transfer and closing are in proper order. We are here to answer any questions you may have about buying or selling a home, and our team will guide you through the entire process.

BUYER

Buying a home may be the single, largest financial purchase in your life and can signify a much-anticipated milestone. That’s why Title First offers a host of resources to help you understand this important personal transaction.

SELLER

Selling a home can be complicated and finding the right owner’s title insurance is just one piece of the puzzle. Title First can simplify this process by giving you the tools you need to get you through the selling process.

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The Relationship Between a Title Agency and a Realtor

Title First Agency works hard to ensure a seamless experience for Realtors and their clients. From contract to closing, Title First handles all the details to help your transactions run smoothly and close on time.

Access to Property Information:

Title First Agency can help Realtors by getting the names, addresses and phone numbers for properties that their client are interested in buying. Maybe the buyer wants to find a home of a certain age or in a particular area – whatever it may be, a Title First Agent has the ability to access a lot of data and can find the information needed. Buyers often drive around neighborhoods that they want to live in and see the perfect home for their family. A Title First Agent can look up the information of who owns the home and how long they have been there at the exact address. This will enable the Realtor and the buyer to put together a homebuyers letter to owner.

Advertising and Marketing:

Title First can assist Realtors in promoting their business with our full line of marketing solutions. For your next listing, make a good first impression on potential clients and prospective buyers with a bound presentation of property information. We have the ability to help you design, print and mail your full-color glossy, postcards. Use our Net-to-Seller tool that will help estimate a client’s profit and present it in a professional format to be shared. Or, give our Title First Agent App a try to provide a higher level of service to your clients. This app will enable you to give quick and easy estimates to any real estate financial question. The app features net sheets, quick estimates, closing,costs, prorated taxes and much more. Finally, email us your MLS link, logo and personal photo and let us create a professional full-color info sheet for your listing.

Legal Expertise:

Title First Agency has experienced real estate lawyers who have worked many years through settlements and closings. It’s an invaluable asset to always have legal experts on hand with a good title company. The buyer, seller and you, the Realtor, can have peace of mind that purchases and end-to-end processes of closing on a property are performed seamlessly and on time.

The Bottom Line: At Title First Agency, we measure our success by your success. That’s why we offer a variety of services to help you grow your real estate business. Beyond the above listed services, the issuing of insurance, and performing title searches, we can manage the escrow account for the home sale. We safeguard all money and documents related to the transaction for the parties involved, such as the deed to the home, closing costs, earnest money deposit and the down payment.

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The Closing: The Final Step in a Real Estate Transaction

You’ve negotiated for the price you want and qualified for a mortgage, and now the only thing standing between you and your new home is the closing, where you’ll sign the paperwork finalizing the deal. But, what happens at a typical closing? Expect many people to be involved, such as your real estate closing attorney, the seller, real estate agents of both parties, and representatives of the title company and lender.

Closings generally take place at the title company that has issued the title policy for the home. This is a neutral place that has access to technology. Documents can be signed, emailed or faxed, and verified. During closing, ownership of a property is transferred from the seller to the buyer. All funds are distributed by the escrow company, and the new deed is registered in the buyer’s name. The buyer also has to bring a check for all of the mortgage and title fees accumulated along the way. A quick rundown:

The buyer’s lender provides a check for the amount owed toward the purchase price of the home.
The seller signs the deed over to the buyer and hands over the keys to the home. This officially transfers ownership to the buyer.
The title company will register the new deed with the appropriate government office and the record will show the buyer as the new homeowner
The seller receives any proceeds earned from the sale once their mortgage balance and closing costs have been paid in full.

Once the huge amount of paperwork is signed, everyone in the room will experience a sense of relief. The worst thing that could happen on the closing day is a delay to a future date due to lack of preparation.

The Bottom Line: A good, experienced Realtor, will have made sure that on the actual day of closing, you are prepared with all of your real estate closing documents, a government-issued photo identification, as well as your form of payment to cover the real estate closing cost. This will usually be in the form of a cashier’s check or a wire transfer, but also bring along a checkbook in case any unexpected fees come up.

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Home Inspection Deal Breakers

Before you buy a new house, a qualified home inspector is always your best bet for a thorough home evaluation, but you should also have a general understanding of what to look out for. A bad home inspection has the potential to derail a real estate transaction, especially if what’s uncovered is an expensive problem. Here are four issues that have been deal breakers, according to some Realtors.

Faulty Electrical Wiring:
The electrical system is an important, and potentially hazardous, part of a home, which is why it is included in every thorough home inspection Newer homes have more supply of power and electrical outlets. Older homes do not. A good inspector should check the outlets throughout the home as well as check the interior of the electrical breaker/fuse box assuring that there are no “double taps” – two electrical circuits attached to a single breaker – as it is a fire hazard. The wires, conduits, and boxes should be securely fixed to the building. There should be no visible signs of damage or deterioration. There should be at least one ground rod or other approved grounding means present at the service.

Plumbing:
Some of these issues are obvious. Skilled inspectors are trained to find obvious, like a clogged toilet as well as the not so obvious, like illegal pipes that could result in being cited for plumbing violations. He will look around the entire home for signs of mildew, fungus or mold related to water leaking from broken pipes and cracks in the ceiling or floor.

Grading Toward the Home:
Water in the basement, damp or wet crawlspaces, foundation movement, cracking and settlement may all be caused by grading. Water in the foundation could lead to rot in the walls, framing members and mold. Some indications of foundation movement include windows that are out of square; interior doors that have large, uneven gaps at the top when the door is closed; or floors visibly out of level. Some of the most experienced home inspectors believe that the most common issue they find during inspections is the lack of grading (improperly sloped soil) away from the home.

Roofing:
A roof usually lasts about 30 years, so you will need to find out when it was installed. A home inspector will look at the quality of the shingles and know if any are curled, broken, or even missing which are signs that you might need a new roof soon.

The Bottom Line: Whether any of these issues are deal breaker depends on your preferences and needs. Any issue such as the four listed might be too expensive or time-consuming to fix. However, you might find these issues acceptable and have the resources to get them fixed. The home inspector should not tell anyone to buy or not to buy a home. It’s just his job to provide all the information needed so that the home buyer can make the right decision for them.

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Title Insurance Protection

Having title insurance from Title First Agency will protect you from the possibility of a claim to ownership of your home by someone. It’s hard to believe this can happen, but it is more common than people think. It’s not usually a plot to steal your home but a confusion with the deed. The laws regarding property ownership are complex and when liens come into play, someone may believe they still own a house that was technically taken over by a bank.

Title problems appear when parties want to be repaid loans and bills outstanding by the same property. There is a lender that made the first mortgage; the lender that opened the home equity line of credit; contractors whose unpaid bills resulted in liens on the property; taxing districts; and even homeowners’ associations all lining up to be repaid from the proceeds of the house, it’s easy to see how they might not agree on who gets paid what, and when.

Without a title search, the buyer buys all those problems along with the house. The problems don’t go away just because there is a new owner. There have been examples of homeowners having to sell the house just to pay the bills.

Title searches are required by all lenders to be sure that title problems are cleared up before a home is bought. It’s not for you. It’s for them. If the lender makes a mortgage with another that already has claims against it, that lender is going to lose that money.

The Bottom Line: The title is proof that a piece of property is legally owned. It’s an extremely important document. Without a clear title, you are taking a tremendous gamble in purchasing a house or other property. The experts at Title First Agency oversee and perform thousands of closings each year. When using Title First, you can sign confidently on the dotted line knowing that all the details of your title transfer and closing are in proper order. We are here to answer any questions you may have about buying or selling a home, and our team will guide you through the entire process.

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Guide to Closing a Real Estate Deal

Closing a real estate deal, signing the papers to make a home yours, can be stressful and long and it involves many steps and procedural formalities. Many things must happen before you arrive at the closing. Here are a few important guidelines that need to happen between the moment your offer is accepted to the moment you get the keys to your new home.

Open an Escrow Agreement

An escrow account can be held by a neutral third party on behalf of the two principal parties involved in the transaction. They will hold all the money and documents related to the transaction until all is settled. A contract or escrow agreement is drafted, which the closing agent reviews for completeness and accuracy.

Title Search is Conducted and Title Insurance is Obtained

Once the title order is placed, the title company conducts a search of the public records. This should identify any issues with the title such as liens against the property, utility easements, and so on. If a problem is discovered, most often the title agency will take care of it without you even knowing about it. After the title search is complete, the title company can provide a title insurance policy.

There are two kinds of title insurance coverage: a Lender’s policy, which covers the lender for the amount of the mortgage loan; and an Owner’s policy, which covers the homebuyer for the amount of the purchase price. If you are obtaining a loan, the bank or lender will typically require that you purchase a Lender’s policy. However, it only protects the lender.

It is always recommended that you obtain an Owner’s policy to protect your investment. The party that pays for the Owner’s policy varies from state to state, so ask your settlement agent for guidance before closing.

Obtain a Closing Disclosure

Your lender must provide a Closing Disclosure to you at least three days prior to closing. Your lender may also have a closing agent provide the Closing Disclosure to you three days before you close your transaction.

If you or your lender makes significant changes between the time the Closing Disclosure form is given to you and the closing, you must be provided a new form and an additional three-business-day waiting period after receipt of the new form.

If the changes are less significant, they can be disclosed on a revised Closing Disclosure form provided to you at or before closing, without delaying the closing.

Be Ready to Close

As the closing day approaches, your agent will order any updated information that may be required. Once the agent has confirmed with the lender and the seller, a final date, time and location of the closing will be set.

On the day of the closing, all the work is complete. You are clear to close. A good Realtor will have been managing and making sure all the paperwork is done and getting the closing process prepared for you.

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