Settlement Process
What Does a Lender Company Do?
Home Appraisal
Home lenders order appraisals during mortgage underwriting. Appraisers take many factors into consideration, including the home's age, size, condition, and location.
Once you have uploaded your documents to the Lender, the Loan Processor can send your file to the Underwriter to approve, pend, or deny your loan. Once the Underwriter has approved your loan, the Loan Processor orders the appraisal. You can order the appraisal before the decision on your loan if you want to, just know that the appraisal fee is non-refundable and if the Underwriter denies your loan you will be out that money.
Direct questions to the appropriate party in the transaction.
For example, title questions (wiring funds) go to the title company, mortgage questions (any financial question in relation to the loan) go to the mortgage company.
What Does a Title Company Do?
Ask local title companies for suggestions of professional consultants such as surveyors, attorneys, architects, civil and structural engineers, geotechnical engineers, and others.
Title Search, Title Commitment, and Tax Certificate
Once the title company completes the title search, you'll receive their title commitment along with a tax certificate.
The title commitment is essential because it identifies the current property owner(s) and any conditions needed for insuring the closing. It summarizes the title company's research and lists any requirements or conditions that must be met before closing. Don't worry—title will review everything thoroughly and handle any concerns.
Did you know that title insurance often excludes coverage for mineral rights? This means that buyers may need to obtain additional coverage if they want protection in this area. It's recommended to hire an attorney to help with contracts related to oil and gas mineral rights in real estate transactions.
The tax certificate gives an overview of the property's assessed value, tax liability, and any outstanding taxes according to the county taxing authority. It shows the property's tax status, including whether all taxes have been paid.
The Title Commitment is a commitment to issue title insurance and is broken into four schedules as follows:
Schedule A:
This section outlines the anticipated transaction type for title insurance, the current property owner (as per County Clerk records), and the property's legal description. It's essential that this information aligns with what's stated in the sales contract.
Schedule B:
Here, you'll find exclusions and exceptions to the insurance coverage. This clarifies any third-party interests or usage restrictions on the property.
Schedule C:
Matters affecting title that require resolution before the closing date by the seller are detailed in this section.
Schedule D:
This section lists all parties entitled to a portion of the title insurance premium, including the Title Agent, Title Service Company, and Underwriters. It also breaks down the premium for the title insurance policy(ies) and any endorsements.
If you have any questions or concerns, feel free to reach out to Title for clarification.
Warranty Deed and Owner's Title Policy
You can expect to receive the Warranty Deed and Owner's Title Policy (OTP) within 90 days of the closing date. If you haven't received them by then, please reach out to your closing office for assistance.
It's important to note that your OTP remains valid for the duration of your homeownership, providing assurance for your property's title even if you decide to sell in the future.
Make sure to keep both the Title Policy and the Warranty Deed in a safe place for your records.
Closing Funds
Closing funds of $1500.00 or more MUST be submitted via wire transfer ONLY.
Do not accept wiring instructions sent through unsecured email. Title's wiring instructions will remain consistent throughout the process.
Closing Documents
The lender will furnish the closing documents, typically in hard copy and/or PDF format, according to your preference. It's advisable to retain both versions for your records.
Ensure all documents, including your property survey, are stored securely. Having these on hand expedites processes like refinancing or selling your home in the future.
