For real estate agents and homebuyers alike, a “clear to close” is a sweet, sweet, sound. But what about when the closing process is stalled, delayed by unforeseen circumstances or other factors? Though some delays are beyond anyone’s control, there are a few things homebuyers can do to minimize barriers to the settlement process. Before we take a look at those, let’s first review the more common reasons behind delayed closings.

Photo by Tristan Colangelo on Unsplash

Common Causes of Closing Delays

• Appraisal Concerns: Overlooked or undervalued repairs missed by the appraiser may need to be addressed before closing, as required by the mortgage lender. Such concerns might include heating or air conditioning problems, roof leaks or cracks, and issues with exterior or interior paint.
• Title Defects: Clouds on title, or problems surrounding the transfer of property ownership from one party to another, often slow the closing process. A title search is performed to screen for title defects like liens, unpaid taxes, unknown heirs and recording errors. Some title defects are simple to resolve, whereas others require more work.
• Incomplete Documentation: Pertinent paperwork, such as homeowner’s insurance and inspection documentation and verification, is required by the lender in order to proceed with funding the loan. Any delay or missing information will slow the closing process.
• Communication Issues: To facilitate a successful closing and minimize roadblocks, maintaining transparency in actions and full disclosure in communication is paramount. The importance of communicating with the right party as soon as possible to resolve any potential or concrete concerns cannot be overemphasized. Checking emails and responding to requests for information can go far to keeping the closing process on track.

Stay in the Know

The best way homebuyers (and agents) can foster a smooth, efficient closing is to stay abreast of how the loan application process is progressing, and provide any requested information or documentation as quickly as possible. Communication is key, and keeping the lines open between all parties involved can help minimize delays in the closing process. The following are additional tips for expediting closing procedures:

• Be sure to complete mortgage pre-approval and loan application paperwork promptly, accurately and thoroughly.
• Gather all necessary documentation, such pay stubs, tax returns, asset statements and other related information, in one central location and have it ready to submit when requested by the lender.
• Call for a home appraisal as early as possible.
• Review and sign your Closing Disclosure (CD) Form three business days prior to your closing date.

Our team at Linear Title & Escrow works diligently and efficiently to streamline your closing process. If you have questions about factors that delay closing, please contact us today.

Lender’s vs. Owner’s Title Insurance Policies

When preparing to close on your home, you’re going to hear the term “title insurance” at some point during the process. There are two types of title insurance, Lender’s and Owner’s policies, and it’s important to know how each impacts your property. Typically required by your mortgage lender, a Lender’s title insurance policy covers their financial interest should title defects threaten your ownership stake in your home. Owner’s title insurance is entirely optional, but highly recommended for a number of reasons.

Purchasing owner’s title insurance is one of the best investments you can make when buying a new home. Owner’s title insurance protects you, the homeowner, from undiscovered title problems or defects that occurred before you owned the property. It offers financial protection and covers legal fees to defend your property interests in court in the event another person can claim an ownership stake in your home.

What Are Title Defects?

Title defects are issues that prevent proper transfer of ownership or rights to the property from one party to the next. Common title defects include:

• Mechanical liens
• Judgments
• Undisclosed heirs
• Unpaid taxes
• Fraud
• Forgery
• Clerical errors
• Improperly probated wills
• Incorrect legal descriptions

How Owner’s Title Insurance Serves to Protect You

When it comes to purchasing title insurance, you have the option of a standard or enhanced policy. As you might expect, an enhanced policy offers greater protection than a standard policy. Your title agent can provide further details on the coverage each policy type offers, but here’s a general overview of the differences between the two:

-Standard Owner’s Policy:

A standard policy covers the basics and most common of title defects, including clerical or recording errors, fraud, ownership claims by other parties and discovery of unknown heirs.

-Enhanced Owner’s Policy:

An enhanced policy protects against everything a standard policy covers, but also includes less common defects such as zoning, easement and encroachment issues, liens, forgery, additional tax assessments, lack of property of access and subdivision violations.

Even if the title search performed on your property was rendered free and clear of title defects initially, there’s always a possibility of a title problem arising in the future. Having an owner’s title insurance policy in place can bring peace of mind in such a situation.

Have question about Owner’s title insurance or the closing process? Talk to our team today!

Sitting at the closing table is an exciting time in your life, whether you’re a first time homebuyer or home buying pro. But regardless of the number of home closings you have under your belt, you likely still have questions about the process.

Here are five commonly asked questions about closing on a home.

1. How much do I need to bring to the closing table? The amount needed to close on a home varies depending on a number of considerations. The type of loan, interest rate, points paid, down payment, HOA expenses, lender fees and other items all factor into total settlement costs. Generally, we can provide the final closing amount to you or your representative the day before closing.

2. How soon can I close? From contract to close, real estate settlements take about 45 days, on average. The best way to help ensure you close as soon as possible is to be well-prepared with information sharing and submission of documents to your loan office. Once our title team has all of the information in hand, we work diligently to streamline the process and get you to the closing table in a timely manner. In some cases, certain obstacles like title defects may slow the process. We work as quickly as possible to resolve any title concerns uncovered during the title search.

3. Can I get an estimate of my closing fees? At times, we can generate a preliminary Closing Disclosure (CD) Form, which is a list of estimated closing costs based on sales price and loan amount. However, it’s important to remember that a preliminary CD is solely an estimate based on rudimentary information. Several factors go into determining total closing costs. The final figures will be remitted via a CD form distributed by your lender three business days prior to closing.

4. What is a title search? A title search is an investigation into the ownership history of a property, to ensure that proper and legal transfer has occurred from one owner to the next. Title defect, or clouds on title, are factors surrounding title that could allow other parties to lay claim to a property. Such defects include liens, judgments, mortgages, undisclosed heirs, forgeries or boundary disputes, among others.

5. Do I need title insurance? There are two types of title insurance: Lender’s Policies and Owner’s Policies. Nearly every lender requires Lender’s title insurance, which protects their interest in the property should another party attempt to lay ownership claim to the home. An Owner’s Policy isn’t required but is HIGHLY recommended. This type of coverage protects your interest, as the homebuyer, should someone try to claim ownership of your property after purchase. Visit our Title Insurance page for additional information.

Have other questions? We have answers! Talk to our experienced Linear Title & Escrow team today!

Closing on a home brings joy, excitement and feelings of accomplishment (and often relief) to all those involved in the real estate settlement process. But depending on which end of the table you sit, closing day represents a culmination of a vast array of steps and procedures that go into making that very closing possible. It may appear as though the file of closing documents you are required to sign and initial seems the result of a straightforward, simple process. However, much preparation, research and communication goes into getting a home loan cleared to close.

Initializing the Closing Process

Though the mortgage process starts with the loan application, the initialization of closing procedures begins when the real estate agent or lender sends a ratified contract and a request for title to the title agency conducting the settlement. Generally, this takes place two to four weeks prior to the scheduled closing date.

What Happens In-Between

Once the contract is received, the title agent initiates a title search on the property. A title search is conducted to ensure ownership of the property can be transferred properly from the current owner to the homebuyer, and typically takes about three to five business days to complete. Any title defects must be resolved prior to closing. The title company then completes the title binder (collection of documents pertaining to closing on the property and mortgage details) and sends this documentation to both the mortgage lender and seller’s representative. The title agent then determines the pay off amount on behalf of the seller and issues clear title.

The Final Hours

On the big day, final closing documents are sent from the lender to the title company. The documents are scanned, organized and compiled for the represented party to review and sign at the closing hour.

Want to learn more about the closing process at Linear Title & Escrow? Contact our experienced team today!

The most anticipated aspect of real estate, sitting at the closing table is the crown jewel of the home buying experience. Receiving the keys to your new home, whether it’s your first or fifth, represents the beginning of a brand new chapter in your life, one filled with hope, dreams and thoughts of lasting memories. But as many of us know firsthand, getting to the point of closing often presents anxious moments, prolonged processes and checked (or unchecked) patience as we travel the (sometimes) prickly path to real estate settlement.

What Are Potential Closing Obstacles?

In some cases, unforeseen events or circumstances beyond your control interfere with a smooth closing process. However, there are steps you can take to get ahead of some potential obstacles and streamline the closing process on your end. Before we get into how you can accomplish this, let’s first take a look at some of these potential roadblocks:

• Insufficient information for mortgage application
• Need for additional documentation
• Discrepancies in appraisals
• Changes to your credit score or income
• Changes in contract agreements
• Issues in title (or transfer of ownership)
• Foreclosures and short sales

How You Can Help Facilitate the Closing Process

• Submit all required documentation to your lender as soon as possible.
• Respond quickly and thoroughly to any requests for information.
• Know and understand the mortgage product for which you’re applying.
• Remain in close contact with your loan officer and real estate agent.
• Make sure you’re available on closing day!

At Linear Title & Escrow, we do everything within our power to ensure your closing is as smooth and streamlined as possible. For more on the closing process, contact our knowledgeable team today!

You’ve found the perfect house, the one situated around your dream kitchen positioned within mere steps leading to a backyard straight off the pages of Home and Garden. Or Coastal Living. Or Southern Living…or whichever style tickles your fancy. You and your family are beyond excited to start a new life in the confines of your perfect home, and can’t wait to begin the process of decorating your new space to your heart’s content, maybe with new furniture or outdoor seating or painting the walls the latest Pantone color of the year.

Whether you’re a first-time home buyer or seasoned pro, you likely have the experience all planned out in your head, probably wishing you could simply snap your fingers to bring you from contract to close. But, there is a process to closing. And having a general idea of the fundamentals of the closing procedure can help keep a positive perspective and realistic expectations on the time it takes to close on your new home.

Common Terms Relative to the Closing Process

We often post discussions related to closing terms, concepts and procedures. Getting back to the basics of the closing process, there are a few common terms that are good to know, or of which to refresh your understanding if it’s been a few years since your last closing.

-Loan Estimate: Document detailing the estimated loan payments, interest rate and other pertinent information of the mortgage product for which you are applying. A Loan Estimate is provided by your mortgage lender within three business days of your home loan application date.

-Closing Disclosure (CD) Form: Document presenting the details of your home loan, terms, closing costs and other information relative to your real estate purchase. The CD form is provided by your lender at least three business days prior to your scheduled closing date.

-Title Search: A process by which a title agent/company investigates the history of a property with respect to proper transfer of ownership, claims to property and a host of other legal factors that may affect the marketable condition of title on a piece of real estate.

-Title Insurance: Types of insurance policies that protect the lender’s interest and your interest (as the homeowner) in a property. Lender’s Title Insurance Policies are required by most mortgage lenders, whereas Owner’s Title Insurance isn’t required but is highly recommended. Visit our Title Insurance page for more on the importance of having Owner’s Title Insurance.

-Escrow: Third-party handling of a real estate transaction, with respect to the holding of funds and management of documentation relevant to the property until said monies or documents are ready to be dispersed.

From Contract to Close

Knowing what happens from the time you sign your real estate contract to when the keys to your dream home become yours is important for newbies and old pros. Keep in mind, what follows here is a general overview of the process that begins with a real estate contract and ends at the closing table. Additional steps or requirements may be necessary, depending on your mortgage product, timeframe and unique set of circumstances.

1. Signing your real estate contract
2. Securing your home loan
3. Home appraisal
4. Home inspection
5. Review of CD Form
6. Final walk-through
7. Closing day!

No matter your level of experience in the home buying process, Linear Title & Escrow is here to streamline the closing experience. Contact our experienced team today!

“Reverse mortgage” is a term we seem to hear more of today. Created for senior adults aged 62 and older, a reverse mortgage (also known as a Home Equity Conversion Mortgage) allows a homeowner to cash out a portion of the equity in their home. Borrowers can elect to receive their funds on a monthly basis or in a lump sum, depending upon the loan type. According to Reversemortgage.org, the amount received depends upon factors that include the age of the homeowner(s), appraisal value of the home and current interest rates.

A reverse mortgage can be a supplemental income source for senior adults, allowing homeowners to liquidize home equity with the promise of no monthly mortgage payments. Reverse mortgages often are used to cover general living expenses, home renovations, medical bills and even to pay off an existing mortgage.

The balance of a reverse mortgage loan is paid when the last surviving homeowner vacates the property or passes away, and the heirs sell the home. The proceeds of the sale are then used to repay the balance of the reverse mortgage, and any remaining equity is passed on to the homeowner’s heirs.

Key Factors of a Reverse Mortgage

• Insured by the Federal Housing Authority
• Issued by a mortgage lender
• Applicants must attend credit counseling
• Minimum age requirement is 62 (youngest borrower)
• Property must be primary residence
• No monthly mortgage payments
• Utilizes a property’s equity as loan collateral
• Structured as a refinance or new purchase loan
• Fixed and adjustable rates available
• Taxes, property insurance and HOA fees paid by borrower
• Condition of property must be maintained
• Must be the only lien on the property
• Interest accrues (compounds) throughout the life of the loan
• Interest paid only on amount received (at repayment)

The Closing Process for a Reverse Mortgage

Closing on a reverse mortgage varies a bit from traditional real estate settlement. In place of the Closing Disclosure (CD) Form, a HUD Settlement Statement is used to itemize fees and other details pertinent to this form of loan. Mortgage Insurance Premium (MIP) is 2% of the home’s appraisal value or FHA lending limit ($679,650), whichever is less. Servicing fee set-aside is processed during closing, deducted from the proceeds of the loan and used to cover anticipated costs of servicing the loan throughout amortization. Remaining closing fees are generally comparable to those standard to any other type of mortgage, and vary by lender; however, additional fees and documentation may also apply.

This information is meant to provide a general overview on reverse mortgages and closing on this type of loan. Please contact a loan officer or credit counseling agency for more information on reverse mortgage products.

Have questions on closing a reverse mortgage? We can help! Contact Linear Title & Escrow today.

Understanding your mortgage options is key to getting the right type of financing for your home. Whether you’re a first-time homebuyer, seasoned pro or current homeowner looking to refinance, there are several options to consider when it comes to mortgage products.

Know Your Options

It’s always important to consult with a qualified expert when deciding on the best mortgage option for your current situation and needs. The following information provides a basic overview of key elements surrounding each home loan type.

Conventional Loans

• Repayment terms typically 15, 20 or 30 years in length
• Interest rate may be fixed or adjustable
• Good credit score (620 or higher) usually required (credit score requirements vary among lenders)
• Usually require down payment of 5% of purchase price or higher
• Down payment amounts less than 20% of purchase price require Private Mortgage Insurance (PMI)
• Not insured by the Federal Government
• Follow mortgage guidelines established by Freddie Mac and Fannie Mae

 VA Loans

• Designed to help those eligible obtain competitive interest rates
• Guaranteed by the United States Department Veterans Affairs
• Good credit score (620 or higher) usually required (some lenders may allow credit scores as low as 580)
• Repayment terms typically 15 or 30 years in length
• Interest rates may be fixed or adjustable
• No down payment or PMI required
• Only service members, surviving spouses of service members and veterans may apply (must have VA eligibility to qualify)

 Adjustable Rate Mortgages (ARMs)

• Introductory repayment period features lower interest rate
• Interest rate and payments following initial repayment period typically adjusts on a yearly basis (rates are influenced by major indexes)
• Repayment terms often 15 or 30 years in length
• Terms of loan are typically 3/1, 5/1, 7/1 or 10/1

FHA Loans

• Backed by the United States Federal Housing Administration
• PMI required for the life of the loan
• Credit score of 580 or higher often required (500-579 may be accepted if higher down payment applied – credit score requirements are lender-specific)

Please note that fees, terms, credit requirements and closing costs vary among loan types and as influenced by other factors. Contact a mortgage professional for exact details on each type of loan.

Have questions about the closing process and your specific loan type? Contact Linear Title & Escrow today!

Title defects present a barrier to transferring ownership of a property from one party to the next. Until resolved, these road blocks prevent the clear-to-close on a real estate transaction. Though there are numerous types of title defects that can occur, we finish our three-part series with a look at how some of the more common types of problems are resolved. Review Part One and Part Two of our series to learn more on clearing other types of title defects.

1. Boundary Disputes: This situation sometimes occurs if a survey is requested by the buyer. To mitigate a boundary discrepancy, the title agent confers with the seller’s side to determine the exact nature of the dispute. The process starts by reviewing the legal survey, and working to ascertain at what point the dispute developed and why. The seller must then take care of any encroachments prior to closing. In instances where the seller and neighboring landowners concur to allow mobile or immobile structures to remain in place, a written agreement must be signed by the current owner and neighboring party. The buyers must be informed and approve of the arrangement as well. If the encroachment has occurred over a long period of time, the seller and their representative may attempt to reestablish clear title through adverse possession. These types of disputes typically are resolved by legal representation through the court system.

2. Incorrect Representation of Marital Status: When title search reveals misrepresentation of marital status on a deed, the settlement office or attorney who prepared the deed must work to resolve the defect. This is performed by filing a deed of correction, or quit claim deed, through the Clerk of Court’s office.

3. Zoning and Easements: These types of title concerns often involve requesting a letter of compliance from the zoning office in the local municipality. Typically, the seller’s representative must request a new survey, and submit it to the Land Recording Office. In the case of a private easement, the property owner must work with the utility company to have it identified and described on an updated land survey.

Protect Your Interest With Title Insurance

Title insurance is your best method of protection against title defects. Having an Owner’s Title Insurance Policy covers legal and other costs of correcting clouds on title, and gives you peace of mind when title defects threaten your real estate investment.

Our friendly, knowledgeable team is always ready to assist! Contact Linear Title & Escrow today for more on title defect resolution.

In our last post, we offered a general overview of how three of the most common title defects are resolved: clerical errors or omissions, unreleased deeds of trust, and judgments or liens. Here, we’ll provide insight into how we clear title for a number of other title problems.

Clearing Clouds on Title: Other Common Defects

Title defects must be resolved prior to closing on a property. Some title defects are simply a matter of filing corrective paperwork, and are relatively easy to resolve. Other defects, however, may require more time and process to clear.

1. Forgery and Fraud: Clearing up forgery and fraud defects is very much scenario-driven, as with many types of title problems. In such cases, legal counsel typically is the appropriate course of action. When a title agent discovers a forged deed or fraudulent circumstances surrounding property ownership, he or she contacts the seller’s side of the transaction to relay the information. The current property owner must then seek the assistance of a real estate attorney to correct the defect through the court systems.
2. Improperly Probated Wills: If a property owner dies intestate or with long-lost heirs, an amended list of any and all heirs must be refiled with the Clerk of Court to reflect the accurate chain of ownership. In such a case, the seller’s representative (or Executor of Estate) must resolve this issue with probate court before moving forward with the sale on the property.
3. Incorrect Legal Descriptions: The manner in which the incorrect description was recorded dictates how this type of defect is resolved. For example, deeds that contain an erroneous number, letter or other information due to typographical error are typically resolved by submitting an affidavit to the recording office (explaining the error). In cases where a deed doesn’t describe the land to which it’s attached, or describes another piece of property altogether, a corrective deed must be submitted. Such a defect often can be resolved rather quickly.

*Note: The information presented here represents examples of individual title defects, and in no way provides a comprehensive description of details surrounding title defect resolution. This information is meant to provide a general idea of how title companies and other parties work to resolve title problems.*

Title Insurance

In each of the title defect cases mentioned here, Owner’s Title Insurance is the best defense against losing your property, and ultimately your financial investment.

Check back in for the third, and final, post of our title defect resolution series!

Have other concerns over title defects, or questions about protecting your real estate investment with title insurance? Contact Linear Title & Escrow today!