First-Time Home Buying: How To Close on a Home
Settling the last details like receiving funds, completing forms, getting the documents for loans and liens, and assuring you get a spotless title to the property before your purchase gets finalized are all parts of closing in which an escrow agent is useful.
Escrow holders look for the following records:
- Tax statements
- Fire and other insurance policies
- Title insurance policies
- Terms of sale and any seller-assisted financing
- Requests for payment for various services to be paid out of escrow funds
- Loan documents
Upon completion of all instructions of the escrow, closing can take place. At this time, all payments and dues for inspections, title insurance and real estate commissions are taken. You'll then obtain the title to the house and the title insurance gets issued as agreed upon in the escrow instructions.
At the close of escrow, in an acceptable form to the escrow. You'll know when it's time to submit the form of payment.
The Escrow Holder Will:
- Assemble escrow instructions
- Perform a title inquiry
- Comply with lender's guidelines as noted in the escrow agreement
- Accept payments from the buyer
- Prorate interest, insurance, tax and other payments according to guidelines
- Record deeds and other legal documents as instructed
- Request title insurance policy
- Close escrow when all terms of agreement of seller and buyer have been met
- Disburse funds and finish instructions
The Escrow Holder Won't:
- Offer advice - the escrow agent must stay at a fair, third-party status
- Offer opinions about the outcome of your taxes
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Mortgage Escrow Account
Creating a Mortgage Escrow Account helps keep track of on-going expenses while there's a loan on your house. Generally, the Escrow Account is partially funded at closing and the home buyer makes on-going contributions through their monthly mortgage payment.
Once you have the basics of the escrow process down, you can be a better buyer.
