Get the owner’s title insurance and buy your home with confidence
Your long wait for buying your house is almost over. You found the perfect house for you, the owner accepted your offer and it is time for closing. There are so many things to think about right now, and the last thing you want is something to go wrong. Working with an experienced closing agent to help with the details and everything run smoothly is a plus.
As soon as the sales contract is signed, the behind-the-scenes work can begin. The process usually takes 30 to 90 days. Read on to learn what happens during each stage of the process.
Select a Closing Agent
As soon as your sales contract is accepted, your real estate agent may place an order with a closing agent with your permission. The closing agent can be a title company, an escrow company or a settlement company.
Most buyers depend on their real estate agents to choose a closing agent for them. Usually, real estate agent selects someone they work regularly and know to be professional, reliable, and efficient. However, you can select your own closing agent if you like. The closing agent will be the one to supervise the closing process and make sure everything is in the right order and on time, without delays.
Draw up an Escrow Agreement
First is a contract or escrow agreement is drafted. After the escrow agreement is drafted the closing agent will review the completeness and accuracy. The closing agent will also be the one to put your deposit into an escrow account until the closing.
Title Search is Conducted
The title company runs a search of the public records once the order for title insurance is placed. The search should identify any issues with the title such as liens against the property, utility easements and so on. Most of the time the title professional will take care of any problem without you even knowing. The title company can provide a title insurance policy after the title search is complete and all the requirements are satisfied.
Shop for Title Insurance
There are two types of title insurance coverage. One is the lender’s policy, which protects the lender for the amount of the mortgage loan; Two is an owner’s policy, which protects the buyer for the amount of the purchase price. If you want to acquire a loan, the bank or lender will ask you to get a loan policy. However, it only protects the lender.
You should always get an Owner’s policy to protect your investment. The party that pays for the Owner’s policy varies from state to state and can be a negotiable item in the sales contract, so ask your settlement agent for guidance before closing.
Obtain a Closing Disclosure
A closing disclosure must be provided to you by your lender or your closing agent at least three days prior to completion of the loan, which in some states may be the same time as closing. The Closing Disclosure provides disclosures that help you understand all the costs of the transaction, including key information like the interest rate, monthly payments and costs to close the loan.
If you and your lender decide to make changes between the time the closing disclosure form is given and completion, they must provide you with a new form and an additional three business day waiting time after receipt of the new form. This applies if the creditor:
– Makes changes to the APR above ⅛ of a percent for most loans (and ¼ of a percent for loans with irregular payments or periods)
– Changes the loan product
– 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
The closing agent gives any updated information that may be required, as closing day approaches. The closing agent will seta final date, time and location of the closing once he or she confirms with the lender and the seller.
All the work is complete on closing day. Your closing agent has been managing the closing process so that you can rest assured, knowing all the paperwork is in order, while you’ve been busy packing, ordering utilities and coordinating the movers.
