The closing is where you and I meet with some or all of the following individuals: the Seller, the Seller’s agent, a representative from the lending institution and a representative from the title company, in order to transfer the property title to you. 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.
If financing the property, your lender will require you to sign a document, usually a promissory note, as evidence that you are personally responsible for repaying the loan. You will also sign a mortgage or deed of trust on the property as security to the lender for the loan. The mortgage or deed of trust gives the lender the right to sell the property if you fail to make the payments. Before you exchange these papers, the property may be surveyed, appraised, or inspected, and the ownership of title will be checked in county and court records.
At closing, you will be required to pay all fees and closing costs in the form of “guaranteed funds” such as a Cashier’s Check. Your agent or escrow officer will notify you of the exact amount at closing.
What is an Escrow Account?
An escrow account is a neutral depository held by your 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. You will pay one-twelfth of the annual amount of these bills each month with your regular mortgage payment. When the bills fall due, the lender pays them from the special account. At closing, it may be necessary 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.
As the buyer, you will normally be expected to pay for the following:
- Lender’s title-policy premium.
- Recording charges for all documents in buyers’ names.
- All new loan charges (except those required of the seller by the lender).
- Interest on a new loan from date of funding to 30 days prior to first payment date.
- Assumption/change-of-records fees for takeover of existing loan.
- Home warranty according to contract.
- Fire-insurance premium for the first year.
- Home inspection.
- Reserve account for taxes and insurance.
- Flood-certification fee.
That concludes our series on buying a new Vail Valley home. When you’re ready to start your Vail Valley Real Estate search, contact the Rocky Mountain Home Team.