Not surprisingly, a fair amount of mystery continues to surround the home buying experience — after all, most people only purchase one or two homes in their lifetime. Even then, the mechanics of the escrow process remain mostly invisible to the consumer. Still, there are things that every buyer should know, and the most important thing you can do as a home buyer is to actively participate!
Obtaining a new loan
If you are obtaining a new loan to complete your home purchase, be sure to stay in close contact with your mortgage lender. There are processes which cannot begin until you provide certain information and documents, so provide any requested documents as soon as possible. Your lender and your escrow team remain at your service throughout the process: be sure to ask questions if you are ever uncertain about what is expected of you.
Your escrow officer will work in close partnership with your loan representative, exchanging information about the terms of the purchase agreement. This data is used by the lender to create a Loan Estimate, as required under lending law. This estimate is designed to give you information about the transaction as a whole, not just the costs associated with the loan. Your lender will continue to process your loan by verifying your credit history, employment, income and other assets.
- Realtors will make arrangements for the physical inspections of the home.
- Your escrow team will be ordering ownership records and other information about the property from the title insurer.
- The escrow office will order statements of account from any homeowners associations, tax data, and loan payoff statements to incorporate into the settlement.
- You will be provided with a copy of the same preliminary title report that the escrow team uses to confirm the status of taxes, the existing liens which have been reported by the seller, and all other matters of record which must be addressed in order that you will receive clear title to the home at closing.
- Your Statement of Information will be submitted for clearance against the General Index of records.
- A Grant Deed will be prepared in your favor, according to the Vesting Worksheet provided by you, and presented to the Seller for execution.
When your new loan has been approved, the closing process kicks into high gear! Now is the time for a final audit of the escrow file:
- Have all of the required reports and invoices been deposited?
- Have all existing lenders deposited payoff statements?
- Is there evidence that a homeowners insurance policy has been arranged?
Now, the new loan documents will be delivered to escrow and all of the final figures will be calculated. These will be presented to you in the form of a lender’s Closing Disclosure and the escrow Estimated Settlement Statement. The escrow office will be contacting you to schedule your signing appointment, and you will be provided with instructions for delivering your final deposit of funds.
Time to take a break from packing up your household; you’ve got a closing to attend!
Once the loan documents have been signed:
- They will be notarized and packaged according to the lender’s specifications.
- The Grant Deed and other recordable documents will be packaged for presentation to the title company. They facilitate the recording of the documents upon receipt of authority from escrow.
- Your final deposit will be receipted in, and your lender will be directed to distribute–“fund”–the new loan proceeds to the title company.
- When the new loan proceeds have been received by the title company’s bank, the escrow officer will authorize the title company to record the Grant Deed in your favor. They will do the same for the Deed of Trust that secures the new lender, and any other documents necessary to the transaction.
The happiest point in escrow for a buyer is to hear that the recording has been confirmed.
Congratulations, you are now a homeowner!
While you are calling the movers and making arrangements to access the keys to your new home, the tasks of the escrow officer are still being completed.
- The title company’s final bill (for title insurance policies and recording fees) is delivered to the escrow holder.
- A wire transfer of any excess loan funds not used to clear title (taxes, loan payoffs, etc.) will also be delivered.
- When these remainder funds are received in escrow, the escrow file is finally disbursed:
- Sale proceeds to the seller
- Payments of all invoices submitted into escrow
- A small buyer refund from the closing reserves (the escrow holder continues to work with estimated figures until the final moments)
- Buyers should check the mail at their new home for a final settlement/closing statement and check within just a few days of the final disbursement.
Case Escrow is proud to assist and educate homebuyers as they navigate this unique and momentous event in their lives. We welcome the opportunity to serve you.