Cox Real Estate Group Buyers Guide

Cox Real Estate Group

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The Purchase Process...

The Escrow Process...

According to the California Escrow Association, escrow is a service which provides the public with a means of protection in the handling of funds and/or documents. Escrow enables the buyer and the seller to transact business with each other through a neutral party, thereby minimizing their risk.

In the escrow, all parties involved give their instructions to this neutral intermediary, the “escrow holder”, whose duty is to assure that no funds or property change hands until all instructions have been carried out to completion.

The Escrow Companies Duties Include: ● ● ● ● ● ● ● ● ●

Serves as the neutral third party between all parties involved Orders the Preliminary Title Report which documents the title status of the property Drafts escrow instructions Prepares required lender documentation and ensures specific conditions are met Orders payoff demands for all items to be paid through escrow Receives closing instructions, documents and borrower’s funds and ensures that all requirements have been met prior to closing Schedules and processes the escrow signing approximately 4—6 days prior to close Closes escrow, disburses funds and issues the Title Insurance Policy to the borrower and lender Records the Deed and other related documentation

Keep in mind that you may be asked to provide information such as legal identification, date of birth and social security number to the escrow officer as proof of identity.

This information is considered highly confidential and is treated accordingly.

Your Signing Appointment...

The more you know about the escrow process, the smoother the transaction will be. There are several pieces of information that you will be required to supply to your escrow officer.

The following is a brief list of items that you will be expected to provide and/or deliver to your escrow officer. ●

CASHIER’S CHECK: Bring a cashier’s check or certified check issued by a financial institution made payable to the title company in the amount indicated to you by your escrow officer. A personal check may delay the closing since the title company is required by law to have “good funds” before disbursing funds from escrow.

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IDENTIFICATION: There are several acceptable forms of identification which may be used during the escrow process. These include: A current driver’s license, Passport, Department of Motor Vehicles ID card , One form of identification must be presented in order for the signature to be notarized

Prior to your signing appointment, the following items, need to be taken care of: ● Final Walk Through of the home : Before close of escrow, it is very important to perform a final walk-through of the home with your agent. This is your last opportunity to make any changes. ● Satisfy all lender requirements: Prior to your appointment, confirm with your lender that all lender requirements have been met, including any last minute underwriter conditions. ● Homeowners Insurance Information: When you are buying a home be sure to order your insurance before the loan has been finalized. ● You must have insurance in place before the lender funds your loan. ● Transferring of Escrow Funds: If you wish to wire or transfer funds for closing, arrangements must be made in advance with your escrow officer.

Loan Process DON’Ts...

DO NOT CHANGE JOBS Don’t quit your job or become self-employed; you’ll need to prove two years of steady employment and work income.

DO NOT MAKE ANY LARGE PURCHASES This is not a good time to buy a car, boat, furniture, washer/dryer or other large appliance. Save your money until after you’re officially a homeowner.

DO NOT USE CHARGE CARDS EXCESSIVELY If you start running up credit debt, it could negatively impact your credit score – and your ability to qualify for the mortgage you want.

DO NOT SPEND MONEY YOU’VE SET ASIDE FOR CLOSING Your lender wants to ensure you have the necessary funds to complete closing – so don’t dip into the money you have saved for this.

DO NOT OMIT DEBTS OR LIABILITIES FROM YOUR LOAN APPLICATION You might not want to disclose things that might look bad, but lenders have access to this information anyway, so don’t look bad by trying to hide something.

DO NOT MAKE LARGE OR UNUSUAL BANK DEPOSITS There are strict rules about where your down payment and closing funds can come from. If you make a big deposit it will raise questions with your lender.

DO NOT APPLY FOR NEW CREDIT You don’t want to apply for other credit, not while you’re also applying for probably the biggest loan of your life. Every inquiry into your credit is visible to lenders. A new credit account could affect your ability to qualify for your mortgage.

DO NOT CHANGE BANK ACCOUNTS You want everything about your finances to be stable and easily tracked; changing banks or accounts can raise red flags.

DO NOT FORGET THAT MORTGAGE POINTS AND INTEREST MAY BE TAX-DEDUCTIBLE But don’t go overboard and start building these deductions into your monthly budget; talk to your CPA or tax preparer about current tax laws and deductions.

DO NOT COSIGN A LOAN FOR ANYONE It may not seem like a big deal, but on paper you’re responsible for that debt – which will affect your credit and your loan-worthiness.

FAQ’s...

WHEN DO I MAKE MY FIRST MORTGAGE PAYMENT?

HOW MANY OFFERS ON A HOUSE CAN I MAKE AT ONE TIME?

If your closing date, for example, is March 15, you will be charged prorated daily interest from March 15 through March 31 on your closing statement.

Your first mortgage payment will be May 1, because that payment will pay the interest for April.

You should focus on one offer at a time.

WHAT ARE THE BENEFITS OF OWNING VS. RENTING? If you own a home, you can receive tax breaks beyond the standard deduction available to renters, since your interest, property taxes and mortgage insurance are tax-deductible. Some of your closing costs are deductible as well. You can choose a fixed-rate mortgage, which sets your monthly principal and interest payment at the same amount for the life of the loan. You also build equity in your home value as you pay down the principal and your home’s value increases. Home equity is a primary source of wealth for many Americans, according to Freddie Mac.

HOW LONG WILL IT TAKE TO CLOSE MY LOAN? 25 to forty-five days, depending on appraisal and underwriting turn times.

WHAT DO I DO AFTER MY OFFER ON A HOUSE IS ACCEPTED? Contact your lender to let them know the good news, order a home inspection and make sure your lender has all the income documentation they need to get your file to the underwriter.

I’M CHANGING OCCUPATIONS; WHAT DOES THAT MEAN FOR MY LOAN APPLICATION? You should keep your current position, as you will need to prove two years of employment.