Qualified Home Loans

What Happens In Escrow?

So the past few months you’ve shopped properties, submitted offers, and finally you get the call from your real estate agent: Your latest offer has been accepted!

You might think it’s the end of the road to property ownership. But really, it’s just the beginning of the hard work. Once you go into escrow, the following items still need to be reviewed:

Home inspection & renegotiations – First you’ll need to schedule a home inspection and have an independent, licensed and insured inspector go through the property to look for problems.
Mortgage financing – Once you’re in escrow it’s time to circle back with your Loan Officer to get into full-speed motion. We will get your appraisal ordered and request any additional documents (i.e. resubmitting paytstubs if needed). Then we will lock your interest rate and provide your loan terms in writing.
Title insurance, plat/survey, schedule of exclusions – You’ll also get a thick packet of documents that you’ll need to review. Most people do not review them, and that’s not really the best idea. It’s always good to review the estimated HUD-1 costs, the title, the title insurance policy schedule of exclusions and all other documents. This is the time, before you close escrow, to figure out if there are title or physical property issues that pose a problem.
HOA documents review – If the property is in a common interest development, you’ll need to review all the relevant homeowners association documents — board of directors meeting minutes and notes, financial statements, state disclosures, reserve study, bank condominium certification, HOA unit demand statement, etc.
Property and liability insurance – You also need to get with an insurance agent and make sure to discuss and procure the proper type and amount of insurance that you’ll need. 
Sign documents, fund down payment & close escrow – As items move forward, you will eventually be ready to sign documents, fund the down payment and verify the lender costs match the good faith estimate (GFE) you were given. Finally, your mortgage loan will be funded, escrow and title will prepare all documents, then go record your purchase documents at the county courthouse.

8 Things Not To Do While In Escrow

You’ve seen lists telling buyers what to do to find the right home but knowing what not to do can be just as important.  All the verifications that were completed during pre-approval are usually done again just prior to closing to determine if there have been any material changes to your credit or income that might disqualify you.

Simply stated…
1. Don’t make any new major purchases that could affect your debt-to-income ratio
2. Don’t apply, co-sign or add any new credit
3. Don’t quit your job or change jobs
4. Don’t change banks
5. Don’t open new credit accounts
6. Don’t close or consolidate credit card accounts without advice from your lender
7. Don’t buy things for your new home until after you close
8. Don’t talk to the seller without your agent

We work very closely with you to get you into your new home. It’s understandable to be excited about one of the biggest decisions you’ll make, but keep these 8 “don’ts” in mind while you’re waiting to sign the final papers at closing. As always, contact us with any questions.