Ensuring A Stress-Less Closing

Posted in Mortgage by Michigan Real Estate Expert on May 16th, 2018

Ensuring A Stress-Less ClosingBuying a home is an exciting and exhilarating time. Between the time your offer is accepted, and when you finally have keys in hand and you are ready to step into your new home, it can be stressful. The escrow period, also known as the closing, can take the most easygoing home buyer to the brink of insanity.

After you have negotiated your best price and come to an agreement, there are ways to make the escrow process less anxiety-provoking. Here are some tips from top real estate agents to help you get through the escrow process without losing your cool. 

Utilize Your Professionals

Trust your real estate agent and home financing professional to walk you through the entire process is key to a smoothly closing escrow. Rely on them to do their job, but don’t be afraid to express any anxieties, and lean on them during negotiations and inspections. They are the experts, so ask questions and ask for advice, but try not to second guess their guidance or recommendations. 

Your additional trusted partner is your mortgage professional. They know how important the financing piece is to this equation and they will be sure to know your timeline and be available to answer questions and assist you throughout this process. 

Stay Organized

Chaos rarely inspires confidence. Stay on top of all paperwork and make sure you sign and return everything to your lender promptly to eliminate delays. The lender and escrow company want the sale to close in a timely fashion, too, so don’t slow them down by being disorganized or failing to return important documentation such as income tax information or bank statements.

Maintain A Healthy Perspective

No home is perfect, so be prepared for inspections that bring some daunting news. Ask to be present when the inspections are performed. The more information you have about your prospective home, the better you will be prepared to negotiate for repairs before they surprise you in the future. 

Ask for credits and repairs as needed, but try to remain objective. Some seemingly minor fixer projects can lead to a much longer time table. You may decide that, when considering the bigger picture and a timely transaction, a couple thousand dollars might not actually be a worth negotiating. 

Be Flexible

Retain as much flexibility as possible during the closing process and focus on the big picture, rather than all of the details. When opening escrow, ask your agent to give you an overview of the expected timeline from beginning to end. Knowing what to expect, and when as well as being aware of projected milestones goes a long way in reducing anxiety. You can, and should, ask to be notified when important milestones are reached.

While you might have it penciled in on your calendar, it’s common for closing dates to change. Instead of thinking of your closing date as set in stone, think of it as a flexible target. Do not book movers until the last minute, so you won’t be stressed if your belongings are all packed in a truck and the escrow date is set forward a day or two.

Don’t forget to breathe!

This is an important time to take care of yourself. Take a run, meditate, or do yoga. Read a book or enjoy a hobby. Moving can be a physically taxing event, so take the time now to relax before the big move.

Before you know it, you will be moving into your new home. Being informed, staying organized and taking care of yourself are key elements. Most important, though, is to rely on your trained professionals to guide you through this process and help to ensure a stress-less closing.

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The Home-Buying Closing Process in a Nutshell

Posted in Real Estate by Michigan Real Estate Expert on May 4th, 2018

The Home-Buying Closing Process in a NutshellThe closing process for a home purchase is an exciting time. The home is finished, the purchase is ready to be finalized and it’s almost time to move in. The final steps of the closing process ensures both parties are able to meet their requirements and all the paperwork is in place and verified.

The Key Players

There are actually four parties involved in a typical closing: the buyer, the seller, the bank or lender financing the purchase, and the escrow agent. Each has an important role in making sure the closing happens effectively and efficiently.

As is common with most purchases, the buyer is already familiar with the need to have a down payment ready and to be committed to a purchase. Additionally, the buyer will have already worked out the loan approval preliminary reviews and steps with the bank financing the purchase if it is not an all cash purchase.

The Escrow Process

During escrow the purchase is then validated through a number of steps. These include:

  • Ensuring the property title is clear of any problems or previous liens (a legal method by which other parties get paid for the seller’s outstanding prior debts).
  • Ensuring the property has been appraised and represents the actual worth represented to the bank.
  • Ensuring the bank is ready to pay the seller with a payment check and that the buyer has paid any down payment as well. Both payments are put into an escrow account managed by an escrow agent and not to be released until all the purchase requirements are met.
  • Ensuring the buyer has been notified, read and has committed by signature to all the purchase documentation necessary to complete the sale. This includes understanding the nature of the home loan, payment responsibilities, and what happens if there is a default.
  • Ensuring any property taxes, homeowner’s association fees, and other fees have all been addressed before the seller transfers the property to the escrow agent, which is then transfered to the seller.
  • Finally, passing along the keys and title of the property to the buyer, the title lien to the bank financing the deal, and the payments for the property to the buyer.

When all the above happens, a home purchase is closed and the home officially belongs to the buyer. The seller also gets paid and can deposit his income accordingly. The escrow agent files all the paperwork with the bank, the county recorder’s office, and copies are sent to the buyer and the seller for their own records.

Contact your trusted real estate professional if you have any additional questions about the closing process as well as other aspects of acquiring your new home. 

 

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Questions and Answers Regarding Escrow Accounts

Posted in Mortgage by Michigan Real Estate Expert on February 16th, 2018

What is an escrow accountWhether you are purchasing a new home or you are considering applying to refinance your home, chances are the lender will require an escrow account. These accounts are often a source of confusion for homeowners. In reality, these accounts benefit the homeowner and help protect the lender.

What is an escrow account?

Escrow accounts are sometimes called “impound” accounts. These accounts are set up to help manage payments of property taxes and homeowner’s insurance. Depending on the individual requirements of the lender, you may be asked to pay as much as one-quarter of these upfront and they will be put into the account for the purposes of making payments.

Who controls escrow accounts?

Lenders have complete control over escrow accounts. However, homeowners are entitled to receive an annual statement advising them of their escrow balance. If there is an increase or decrease in insurance payments through the year, a homeowner may request the lender evaluate the escrow account and change the amount that is paid.

Is interest paid on escrow accounts?

There is no mandate to pay interest on escrow accounts. When you refinance your home, the funds for your taxes and insurance are calculated into your overall payment. The portion that is to be used to pay taxes and insurance is placed in escrow. Federal laws do not require lenders to pay interest on these accounts.

What happens if I sell my home or refinance?

When you sell or refinance your home, your escrow account will be credited at closing. The amount may be used to lower your out-of-pocket costs or may be turned over to you as a direct payment.

What happens if there is not enough/too much money in escrow?

If your lender has underestimated your escrow payments, they may request you send an additional payment to make up the difference. In the event you are paying too much into escrow, your lender has the discretion to release the overage amount directly to you. In most cases, shortfalls or overages of $50 or less are typically not a major concern.

If your lender requires you to have an escrow account for the taxes and insurance portion of your mortgage payment, it can be very helpful. Escrow accounts help ensure you do not have to come up with a large payment once a year for insurance or quarterly for taxes.

In some cases, if a lender does not require an escrow account, as a borrower, you may request they escrow your taxes and insurance for convenience.

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