When does settlement occur?
With sales, the settlement date is agreed to by the parties in the contract. It is normally fixed to allow enough time to satisfy all the conditions of the contract and to arrange the financing. Settlements on refinances are scheduled when the lender is ready to proceed with the loan.
Who will be at the settlement?
Buyers and sellers, or in the case of refinances the homeowners, must be at settlement. Real estate agents representing the buyers and sellers will also attend as will, in some cases, a loan officer or mortgage broker. Our settlement attorney will conduct the settlement.
What if I can’t be at settlement?
Buyers, sellers and refinancers who can’t attend settlement can appoint someone as their attorney-in-fact to participate in the settlement. To do this the person who will be absent from settlement must execute a power of attorney that we will prepare. The original power of attorney must be provided to the us at or before settlement.
Who chooses the settlement company?
In the case of sales, the buyer and the seller select who will be the settlement agent. Sometimes the buyer and the seller each select their own settlement agent, and the settlement occurs in two different locations. With refinances, usually the lender recommends the settlement agent, but the homeowner has the right to select who they wish.
What will it cost to settle?
Our fees are fixed, for the most part, based on the type of transaction (i.e. sales, refinances, home equity loans). Title insurance premiums are calculated based on the sale and/or loan amount. All parties can expect to pay government recordation/transfer taxes. Borrowers will incur lender’s fees, interest and tax and insurance escrows at settlement.
What should I bring to settlement?
Everyone (buyer, sellers and refinancers) must bring a valid picture identification to settlement. Sellers should also bring keys, garage door openers, manuals, parking or pool permits, etc. Buyers must bring certified funds (i.e. cashiers check) made payable to Highland Title & Escrow for the amount due for their purchase. Anyone expecting to receive funds from a settlement and wish to have it wired to a bank account, should bring wiring instructions for that account.
What happens at settlement?
The parties review the settlement statement (known as a “HUD-1”) for accuracy. With sales, the seller executes a few documents, including a deed transferring title to the property to the buyers. Buyers and refinancers review and execute loan documents and tender a cashiers check, where necessary, to pay the amount due on the settlement statement. The entire process normally takes one hour.
What is title insurance and is it necessary?
Title insurance is designed to protect an owners' and lenders' interest in the property. For owners it insures that they have clear title, i.e. not subject to the claims of others, in the property, so that they can occupy, use and sell it without the risk of loss from issues that arose prior to taking ownership. It’s a one-time expense which is based on the purchase price of the property. Owner’s title insurance protection extends throughout the time the policyholder owns the property and even after it is sold. Owner’s title insurance comes in standard and enhanced policies. Enhanced policies cost more and cover 28 additional risks than standard policies. Lenders will almost always require that title insurance be purchase on its behalf by the borrower which will protect only the lender for the amount being borrowed. Lender’s title insurance does not protect the owner and, unlike owner’s policies that are more or less perpetual, lender’s insurance lapses when the loan is paid off. Also, where owner’s title insurance is optional, lender’s coverage is mandatory. One major benefit of buying owner’s title insurance is that you will receive a discount on the price of lender’s insurance every time you refinance your home.
When do sellers/refinancers receive their money?
By law, a settlement agent cannot disburse any of the funds it has received in a settlement until all the documents that must be recorded (i.e. the deed and the mortgage) are actually recorded in the circuit court land records where the property is located. Once that occurs, the settlement agent has two days to disburse the funds. In the case of sales, the documents are sent to the courthouse the first business day after settlement. With refinances, the documents are sent the first business day after the borrower’s right to cancel expires.
How do I know how much money is required to settle?
We will not know exactly how much will be owed at settlement until we receive the lender’s itemization of the fees to collect. This usually happens one business day before settlement. Sometimes, for reasons beyond our control, we receive this information the day of settlement. You should be able to contact us one business day before settlement for the figure. If the figure is not available, you should use the figure given to you by the lender as the Good Faith Estimate of Closing Costs as a substitute. It is not uncommon for the figure to increase or decrease slightly at settlement and so it is a good practice to add 0.5% of your loan amount to the cashiers check. If this exceeds what you need, you will receive a check for the difference at settlement.
When will the seller’s mortgage be paid off?
Checks paying off all mortgages will be sent by overnight mail on the day of recordation. We always collect extra days of interest on the mortgage loan to insure that it is paid off in full. The lender will remit to the borrower any overpayment.
What happens to escrowed taxes and insurance for loans that are paid off?
These are either remitted directly to the borrower from the lender within a few weeks after settlement. In some cases, the lender might credit this against the payoff amount it is due. |
