Once your offer on a house has been accepted, you’re ready to move onto the next stage in the mortgage process: escrow.
Escrow is the stage in which your earnest money check is held by a third party until you (the buyer) and the seller come into contract and close the deal. Your earnest money is like a deposit on the house – a show of good-faith intent on your offer for the house. Neither you nor the seller will have access to this money while it is in escrow. The money is protected until the sale and transfer are final, so the money cannot be used by either party.
After you’ve entered escrow, focus on these other items important to your transaction:
Schedule a home inspection to look over the property for any potential problems or violations. Take notes during the inspection and consult with your seller to see if any repairs need to be made. If you’re working with a real estate agent, you should discuss whether repairs (or cost of covering them) can be worked into your purchase agreement.
Order your appraisal and submit any remaining documents your lender might need. Completing your side of the mortgage application will smooth your path to closing.
Don’t let the stack of documents, including title abstract, title insurance policy, HUD-1 costs and exclusions, headed your way overwhelm you. Be sure to review specifics on your house, property lines and its transfer to raise flags before you sign at closing.
If you’ve financed your purchase with a mortgage, you are probably required to get homeowner’s insurance before you can complete your purchase. Get in touch with your insurance agent to discuss your coverage options and the type of insurance you’ll need.
Sign, fund and verify.
Schedule your closing date and bring a certified check. At closing, you’ll sign all necessary documents to purchase your house and provide the down payment with a certified check (check with your local closing agent on down payment and closing costs requirements).
Once you’ve completed these five steps, you’ll be the proud owner of your new property! If you have any questions about escrow, please contact Mutual Title today!