Behind The Scenes - Settlement
Settlement – An Escrow Officer oversees the closing of the transaction: seller signs the deed, buyer signs a new mortgage, the old loan is paid off and the new loan is established. Seller, Realtors, attorneys, surveyors, Title Company, and other service providers for the parties are paid.
What Is A Real Estate Closing?
A “closing” is where you and I meet with some or all of the following individuals: the buyer and the buyer’s agent, a representative from the lending institution and a representative from the title company, in order to transfer the property title to the buyer. The purchase agreement or contract you signed describes the property, states the purchase price and terms, sets forth the method of payment, and usually names the date and place where the closing or actual transfer of the property title and keys will occur.
What Is An Escrow Account?
An escrow account is a neutral depository held by the lender for funds that will be used to pay expenses incurred by the property, such as taxes, assessments, property insurance, or mortgage insurance premiums which fall due in the future. One-twelfth of the annual amount of these bills each month are paid with the regular mortgage payment. When the bills fall due the lender pays them from the special account. At closing, the buyer may have to pay enough into the account to cover these amounts for several months so that funds will be available to pay the bills as they fall due.
Closing Statement (HUD1)
DEFINITION: Closing Statement (HUD1) - A financial statement rendered to the buyer and seller at the time of transfer of ownership, giving an account of all funds received or expended.
DEFINITION: Deed - Written instrument, which when properly executed and delivered, conveys title to real property.
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