Whether you’re a first-time homebuyer or looking to purchase a new home, it’s important to know the workings of the real estate closing process. The highly regulated title and escrow industry may have changed since your last closing experience. And if you’re new to the home buying process, settlement procedures can be confusing. Here are five key facts every homebuyer should know about the closing process.
- Lender’s and Owner’s Title Insurance are different types of policies. Nearly all lenders require homebuyers to purchase a Lender’s Title Insurance Policy. An Owner’s Title Insurance Policy, while not mandatory, is highly recommended. An Owner’s Policy protects your financial and real estate interests as the new homeowner, in the event title troubles arise after closing.
- Careful review of the Closing Disclosure (CD) Form is highly important. Your lender will remit to you a Closing Disclosure Form at least three business days prior to your closing date. This document provides detailed information regarding your loan, payment requirements and closing fees. Careful review of this document upon receipt is imperative. Any discrepancies you detect or concerns you have should be resolved prior to sitting at the closing table.
- Proper identification is required at closing. Be sure to bring a current driver’s license or passport to your closing. If a representative is attending the closing and signing on your behalf by Power of Attorney (POA), the original POA document will be required.
- Closing funds must be submitted in certified form or wire transfer (if funds are needed for closing). Personal checks (unless under $500) and cash typically are not accepted. Wired funds must be received no later than the day of closing.
- As the homebuyer, you have the option of whether to request a boundary survey prior to closing. A boundary survey is a formal document outlaying the exact location and position of your property lines, and any easements that may exist in relation to the property. It serves to mitigate any future disputes over your property in the event another party attempts to claim a portion of your property as their own.
Educating yourself on current settlement proceedings and doing your due diligence when it comes closing on your new home is key to facilitating a smooth closing process. Remaining well-aware of the proceedings also helps ensure there are no unwelcomed “surprises” on the day of closing.
Have questions about the closing process? Contact the Linear Title & Escrow team today!