First-Time Home Buying: How To Close on a Home
The escrow holder insures that all terms and conditions of the seller's and buyer's contract are completed prior to the sale being finalized. This includes getting payments and certificates, completing required forms, and seeking out the release documents for any loans or liens that have been cleared with the transaction, assuring you have a clear title to your home before the agreed upon price is fully paid.
The certificates the escrow company may collect include:
- Loan documents
- Tax statements
- Fire and other insurance policies
- Title insurance policies
- Terms of sale and any seller-assisted financing
- Requests for payment for various services to be paid out of escrow funds
Upon completion of all portions of the escrow, closing can take place. All payments owed and fees are taken and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). Title to the property is then given to you as now current homeowner and related title insurance is issued as outlined in the escrow policy.
At the close of escrow, fees are paid in an acceptable form to the escrow. You'll know when it's time to submit the form of payment.
The Escrow Holder Will:
The Escrow Holder Won't:
Mortgage Escrow Account
Creating a Mortgage Escrow Account helps keep track of on-going expenses while there's a loan on your house. Though most home buyers make payments via their monthly mortgage payment, Escrow Accounts are deposited into at closing as well.
This is a quick run-down of the escrow process. Your individual plan might be slightly different depending on your lender and your escrow company.