First-Time Home Buying: How To Close on a House
Tying up any loose ends like receiving funds, finishing forms, obtaining the documents for loans and liens, and making sure you get a clear title to the home before your purchase gets finalized are all part of the job of the escrow agent.
The pieces of paperwork the escrow agent may collect include:
Upon completion of all instructions of the escrow, closing can take place. At this time, all payments and fees for inspections, title insurance and real estate commissions are taken. You'll then secure the title to the property and the title insurance gets issued as outlined in the escrow instructions.
At the close of escrow, payment of funds shall be made in an acceptable form to the escrow. You'll know when it's time to submit the form of payment.
The Escrow Holder Will:
- Prepare escrow instructions
- Request title research
- Comply with lender's guidelines as specified in the escrow agreement
- Receive payments from the buyer
- Prorate tax, interest, insurance and other fees according to instructions
- Record deeds and other documents as instructed
- Request title insurance policy
- Close escrow when all instructions of seller and buyer are met
- Disburse monies and finalize instructions
The Escrow Holder Will Not:
- Offer advice - the escrow holder stays at an impartial, third-party status
- Offer opinions about future tax estimations
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The Escrow Holder Will:
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The Escrow Holder Won't:
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Mortgage Escrow Account
A Mortgage Escrow Account is established to make payments for rolling fees while there is a loan on the 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 rules of the escrow process down, you can be a more assured buyer.