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First-Time Home Buying: Closing
Escrow: An escrow holder is brought on to assure your property closes on time and the transaction goes smoothly.
Escrow companies hold money for "safe-keeping" in a deal between a buyer and seller.
For example, in a Web transaction, PayPal is the secure third party that obtains the buyer's money, and then disburses the funds to the seller.
The escrow company makes sure that the terms and conditions of the agreement between the seller and buyer are met prior to the sale being completed.
The pieces of paperwork the escrow agent may secure include:
- Terms of sale and any seller-assisted financing
- Requests for payment for various services to be paid out of escrow funds
- Loan documents
- Tax statements
- Fire and other insurance policies
- Title insurance policies
Upon finishing of all instructions of the escrow, closing can take place.
All expenses like title insurance, inspections and real estate commissions are paid.
You'll then secure the title to the property and the title insurance gets dispersed as agreed upon in the escrow instructions.
The escrow holder receives a payment when the closing is complete.
I'll keep you informed on the procedure.
The Escrow Holder Will:
The Escrow Holder Won't:
- Write escrow guidelines
- Petition title research
- Comply with lender's standards as specified in the escrow agreement
- Accept payments from the buyer
- Prorate interest, insurance, tax and other payments 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 finish instructions
- Advise you - the escrow agent stays a neutral, third-party status
- Dispense opinions about the outcome of your taxes
Mortgage Escrow Account
A Mortgage Escrow Account is started to pay on-going 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.
Now you know more about how to close on your future home. And, you can be a more informed home buyer and future homeowner.