Questions I Am Often Asked
SETTLEMENT, CLOSING FINISH, END, COMPLETION, CONSUMMATION, CONCLUSION, CESSATION,FINALE, DONE... SETTLEMENT - culmination of the purchase process. Shortly after finalizing the sales contract you will select a title company.
TITLE COMPANY - responsible for: - ordering the title examination and survey - providing the mortgage lender with a title insurance commitment - implementing proper steps to be sure the seller can convey marketable title - scheduling the actual time and place for the closing with all concerned parties. The settlement agent will receive the loan documents from the lender and will finalize the preparations for closing following the loan instructions included with these documents.
The closing itself usually takes about an hour. During the closing, numerous documents must be explained and signed, funds must be received and disbursed, last minute questions on the condition of the property and operation of systems must be answered, and the keys must be delivered. In many instances, buyers need to coordinate settlement to coincide with the arrival of their movers and cannot afford delays. Choosing a reputable, experienced title company is crucial to a smooth settlement.
The closing will be conducted by a settlement agent, typically an attorney, who will explain the various documents to be signed. There are a couple of things to keep in mind. First, if you want those keys, you will have to sign the forms. Most settlement agents will walk you through this at your own pace. If you are feeling rushed, just ask him to slow down. Second, most of the documents you are signing are strictly boiler plate. I will address the documents that you need to pay particular attention to below:
THE SETTLEMENT STATEMENT The settlement statement, often referred to as the HUD-1, summarizes the financial aspects of the transaction. For this reason it is the document that warrants the closest scrutiny at closing. Basically the HUD-1 translates the terms of your sales contract and mortgage commitment into numbers and acts as a balance sheet for an accounting between the buyer and seller.
I am dedicated to providing you a copy of the HUD-1 two days prior to settlement for your review. At that time I will go through the statement line by line with you either in person or over the phone, whichever is more convenient for you.
THE NOTE This is a written promise from you, the borrower, to pay the lender a definite sum of money at an agreed interest rate over a stipulated period of time. You should check to make sure that all of the variables just mentioned are correct.
THE REST Most of the other documents require a signature, and obviously have importance, but the only things to check would be the spelling of names and addresses. As I said above, the myriad of forms are required by law and are signed by everyone who gets a mortgage on the purchase of real estate. By all means know what you are signing.
WHAT TO BRING? After we discuss the HUD-1 prior to settlement, you will need to bring a certified or bank check in the stated amount. If you have received the complete insurance policy from your agent, bring it to closing.
SUMMARY That about does it for the pre-settlement process. The main thing to remember is - there is no such thing as a stupid question - go ahead and ask me if you have any concerns
This months joke:
Question What starts with E, ends with E and only has one letter?
Answer: An envelope
Cartoon of the Day
compliments of WhitePalm
Question:What are the Tax Benefits of Owning a Home?
Answer:
Mortgage interest payments are deductible By owning a home, you can write off the interest on your mortgage on your tax return. In many cases, this will take you above the minimum itemized deductible, allowing you to write off many other items. I strongly suggest you check with a tax accountant to make sure it is to your benefit to itemize deductions.
Another tax benefit is: The tax code is generous to homeowners. Not only can you deduct the interest on your home mortgage, but you can usually avoid taxes on the profit from selling your home if you buy another home of equal or greater value within two years of the sale. Also, IRS rules allow you to avoid taxes on up to $250,000 (or $500,000 if you are married and filing jointly) of profit from the sale of your primary residence.
Give Risa Saltman a call at 1-800-699-4901.
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