Blog
What Do I Bring To Closing?
Closing day.
Whether you’re the buyer or seller in the Fort Myers or Cape Coral areas, it’s a big day! You are either becoming the owner of a property, or you are surrendering ownership in return (ideally) for financial gain. Perhaps your transaction went smoothly, or perhaps there were bumps in the road, and yet it’s finally come down to the last bit of signing documents. It’s almost over, and the last thing you want are delays because you didn’t have everything you needed at the closing table.
What to Bring to The Closing
Photo I.D.: All parties must bring official, government issued photo I.D. such as a driver’s license or current passport.
Cashier’s Or Certified Check: You need a bank issued check or checks to cover your down payment and any closing costs you are responsible for paying. The title company cannot accept a personal check or cash, so it is important to plan in advance and bring a certified or a cashier’s check made payable to the title or closing company. Federal law requires that you be told the amount you need to bring to closing at least one day before settlement, so you should be able to pinpoint the exact amount for the check(s).
Your title agent can also tell you whether you should bring one certified check or two. In some instances, wiring funds is permitted, however, be sure to do so with plenty of time. Your closing will be delayed if funds are not available when you get to the signing table.
Proof of Insurance: Buyers must provide proof of insurance if required by the terms of the sale or by the lender. The closing agent needs to see documentation proving your coverage is in effect for one year. Even if your real estate agent tells you that the title company already has a copy, play it safe and have your proof of insurance with you.
Outstanding Documents: In the days before your closing pay very close attention to the instructions from your title or closing company. They will let you know if any additional documents are needed. If you have a copy of your sales contract, you can bring it with you to ensure all numbers and terms match the purchase agreement.
Items to Access the Home: If you are the seller, you will need to surrender all copies of all of the keys to the house, as well as garage door openers and alarm system codes. If you are responsible for any costs not covered by the proceeds of the sale, you must also bring a certified or a cashier’s check made payable to the title or closing company to cover those expenses.
Patience: Prior closings may run behind, wires may be delayed, paperwork can get stuck in printers. Chances are you’ve waited anywhere from a couple of weeks to a couple of months for this closing, a couple more hours may be frustrating, but worth it. Read a book, answer emails, play a game on your phone, anything to pass the time and keep yourself calm.
Whether you are the buyer or seller, being prepared will keep you calmer and allow the closing to proceed smoothly. If you are not sure you have everything you need, consult your title company representative. Finally, if you are buying a house, bring a keychain for those special keys to your new home!
At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.
In case you missed it, check out our last Title Junction post: Can My Settlement Charges Change?
Can My Settlement Charges Change?
Looking to buy a home in the Fort Myers or Cape Coral areas and wondering if your settlement charges can change if you are in the middle of the closing process? The answer…
Yes, if circumstances change, such as:
- a natural disaster damages the property or affects closing costs
- if any of the 3rd-parties impacting the estimate goes out of business during underwriting
- new information on you or the transaction affecting settlement is discovered.
If any of these events change 3rd-party charges beyond the 10% tolerance limit creditors may issue a revised Loan Estimate.
If a creditor issues a Loan Estimate they are presumed to have collected all 6 pieces of required information. They may not claim a change in circumstances by receiving one of these pieces of information AFTER issuing a Loan Estimate.
At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.
In case you missed it, check out our last Title Junction post: Buy A Bigger House Or Build An Addition?
Buy a Bigger House or Build an Addition?
Do you live in Fort Myers or Cape Coral? Have you been looking around your house and wishing for more space?
For many homeowners, there comes a time when more space is a must. The reasons include a broad array of life events such as separate rooms for older kids, baby on the way, a home office, a hobby room, moving in an elderly parent, finally getting that bigger kitchen, adding a bathroom, or maybe you just want more room in shared living areas.
The desire for more space often sparks a classic debate in homeowners: do we buy a new home or do we build an addition? Both options have their advantages, yet the right answer is unique for each homeowner. Considerations range anywhere from budgets, taxes, to emotional factors.
To help you decide, we’ve put together quick and easy guide on when to build, and when to buy. Remember, there is no one right or wrong answer and what works for you and your family may differ from what works for others.
Buy a New Home When:
- The idea of finding, interviewing, and managing a General Contractor is more than you can bear.
- The ROI (return-on-investment) for a remodel isn’t there. You won’t regain your investment and/or you will overprice your home in your current neighborhood.
- You can’t fathom the thought of living through a remodeling process that may last weeks or months.
- The idea of house hunting is exciting to you and your family.
- The market conditions are right for you to sell your home, the tax implications are favorable, and you and your family are emotionally prepared to leave your current home.
- You have consulted with a qualified real estate agent and understand the local market conditions and the average home price of houses that have all the features you want in a home.
- You have consulted with a qualified mortgage broker and are pre-qualified for a loan amount that you can afford that is aligned with the prices of homes with the features you want.
- You are ok with keeping your existing home and buying a second home, with an understanding of relevant tax laws and are prepared to carry both mortgages.
Build an Addition or Remodel Your Existing Home When
- Permitting and building codes in your area allow you to make your desired changes to your home.
- You have the interior and/or exterior space on your property to transform your home the way you want it.
- You have very specific wants and needs and you want it done your way.
- You have access to qualified and licensed contractors and you enjoy managing projects, including dealing with emergencies and managing overruns.
- The project makes sense financially and you have access to non-emergency savings or a home equity loan that more than covers the project budget.
- You and your family can comfortably live through an extended remodeling project that may include limited access to parts of your home and times without power or water.
- The project can be done in a manner that is sensitive to your neighbors and mindful of their property and quiet times.
Deciding to Buy or Build
It can be so exciting to shop for a new home, yet it can be equally thrilling to see the home you already love being transformed bit-by-bit every day during a remodel. Ultimately, what you decide to do needs to make sense financially, emotionally, and practically. The good news is that regardless of which path you take, you end up living in a space that is better suited for you and your loved ones.
At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.
In case you missed it, check out our last Title Junction post: When Do I Get My Closing Disclosure?
When Do I Get My Loan Closing Disclosure?
Trying to understand your loan terms and costs for an upcoming purchase in the Fort Myers or Cape Coral areas?
For eligible transactions, including most residential real estate purchases, creditors must provide a Closing Disclosure form documenting the actual transaction terms and costs THREE business days before consummation. It must be in writing, whether paper or digital, and disclose ONLY the information specified by the CFPB (Consumer Fiancial Protection Bureau).
If terms or costs change prior to consummation the creditor must provide a corrected disclosure containing the updated terms. In some cases, this may require an additional 3-business-day waiting period to consummation.
Consummation and Closing are legally distinct although they may occur at the same time depending on applicable State laws. Consummation occurs when you become contractually obligated to the CREDITOR on the loan not, for example, the real estate seller. The Disclosure must be delivered three business days prior to the legal Consummation date.
At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.
In case you missed it, check out our last Title Junction post: Calculating Your Cash To Close.
Strange Examples When Title Insurance Matters
Are you buying a home in the Fort Myers or Cape Coral areas? If you ever questioned why title insurance matters here are a few examples of when it came in handy.
While Homeowners Insurance covers loss or damage to your home, structures on your property, personal property, and provides liability protection for accidents that occur on your property, Title Insurance for owners is quite different.
Simply stated, Title Insurance is protection against a broad array of issues that can threaten the ownership of your property including liability for violations that happened before you purchased the property.
There are two types of title insurance policies. A lender’s policy protects your mortgage lender’s interest in your property up to the amount of the loan. However, the lender’s title insurance will not cover many issues that are covered by the lesser known owner’s title insurance policy. The owner’s policy addresses the homeowner’s liability and exceeds the loan amount up to the purchase price of the property. It’s an inexpensive and essential bit of insurance to have…because strange things do happen that only your owner’s title policy will cover.
Not The Right Mr. Jones
The real estate sale was uneventful. The buyer’s moved in, life went on, until about a year after the sale a gentleman knocks on their door demanding to know why they were living in his home. Turns out the gentleman’s son was supposed to be caring for the house while he was working overseas. Instead, the son forged his father’s signature, sold it, and kept the money. The forgery was facilitated by the fact that the son was a junior so the name on his ID matched all the legal documents.
The title insurance policy covered the father for the value of his home and the issuing title company pursued monetary restitution from the son for the money he received after he illegally sold his father’s house.
They Built The House In The Wrong Place
A Real Estate Attorney shared in a chat an incident in which the original house was built in the 1930s. In 1998 a second owner attempted to sell the home only to be informed by the buyer’s bank that the house had been built on the wrong lot. Apparently, property lines and lots got jumbled a lot in this area in the early 1900’s and this error in the deed wasn’t discovered when the first owner sold it.
And it was a big error. Fortunately, the second owner had title insurance. The issuing title company took on the task of tracking down the original owner’s son for signatures to fix the problem. All the research, the document preparation, plus the attorney and registry fees were covered by the title insurance policy.
The Walking Dead
An older woman passed away leaving her substantial home to her six remaining sons. Wanting a quick sale, they priced the home attractively and soon enough new owners were in place. The proceeds were divided among the six brothers, since the seventh brother was a sea captain that had been declared legally dead after having gone missing at sea for over a decade.
Sometime later, the sea captain, who was very much alive, attempted to visit the home only to discover his mother was gone and the house had been sold to strangers. He promptly sued the new owners for his inherited share of the home. Thankfully, with owner’s title insurance in place, the new owners could rely on the title company to navigate the complex legal situation and reach a resolution.
Happens Much Too Often
The last example is not at all strange. In fact, it is compelling for the opposite reason, it highlights a common risk homeowner’s have when they bypass an owner’s title insurance policy. Mr. Ford, nearing retirement uses a big portion of his life savings to buy a beautiful plot of land in the country. The plan is to build his dream home and enjoy a peaceful retirement. Shortly after closing, he discovers that the prior owner had not paid an undiscovered lien against the property. Mr. Ford is suddenly accountable for a $100,000 debt.
During the purchase of the property, Mr. Ford had been required to purchase title insurance for the benefit of his lender, which meant the bank was protected from any loss related to the property. However, Mr. Ford did not know he had an option to purchase owner’s title insurance which would have released him from liability and saved him from a financial disaster.
Peace of Mind
Whether through intentional fraud, sheer error, or incompetence, important factors can be missed during a real estate transaction. These situations can be legally complicated and very stressful. While purchasing an owner’s title insurance policy is optional, it can be the one small investment that saves you from living a title related nightmare.
At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.
In case you missed it, check out our last Title Junction post: Calculating Your Cash To Close.
Calculating Your Cash To Close
Applying for a loan for your purchase in the Fort Myers or Cape Coral areas and trying to understand the loan terms? Let’s dig in to Page 2.
Page 2 of the Loan Estimate provides the current ESTIMATED cash to close. Some costs will stay the same between estimate and closing. Some will change.
- A – Origination Charges – should match.
- B – Can’t Shop – 10% Tolerance
- C – Can Shop – no tolerance limit, BUT IF you select a provider from your lender’s list their actual cost should be no more than 10% greater than the estimate.
- E – Recording Fees are also subject to 10% tolerance
- F – Prepaids, G – Initial Escrow and H – Other, such as Owner’s Title may vary from the Loan Estimate without tolerance limits.
These estimates of closing costs plus loan details, Down Payment, Deposits Credits and Adjustments are used to calculate your estimated cash requirements when the loan finally closes. Consider the possible changes and tolerances when evaluating a loan decision.
At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.
In case you missed it, check out our last Title Junction post: Title Insurance Versus Property & Casualty Insurance.
Title Insurance Versus Property & Casualty Insurance
Are you purchasing a home in the Fort Myers or Cape Coral areas and not sure about the difference between Title Insurance versus Property & Casualty Insurance?
When purchasing a home, there are different types of insurance involved in the buying process. The terms can be confusing, and buyers may not realize that they need different policies to protect against unique situations. While securing homeowner’s insurance seems a given, buyers may overlook title insurance, which is equally important.
The good news is that while homeowner’s property and casualty insurance carries an ongoing premium for coverage, title insurance requires only a one-time payment.
What is Title Insurance?
Title insurance is protection against issues that can threaten your ownership of your property and protection against liability for problems that happened before you purchased the property.
There are two types of title insurance policies. There is a lender’s policy which most banks and mortgage companies will require as part of your loan. The lender will require title insurance that protects their interest in your property up to the amount of the loan. However, in order for your interest in the property to be protected, you must secure an owner’s title insurance policy. These policies address the homeowner’s liability and exceed the loan amount up to the full value of the property.
Most title insurance policies cover: forgery and impersonation, undisclosed (but recorded) prior mortgage or lien, undisclosed (but recorded) easement or use restriction, erroneous or inadequate legal descriptions or surveys, lack of a right of access, silent (off-record) liens, pre-existing violations of subdivision laws, zoning ordinances or building permits, and more.
What is Property and Casualty Insurance?
Homeowners insurance is one type of property and casualty product. Also in this P&C category are other forms of coverage such as renters insurance, auto insurance, and power sports insurance. Property and casualty insurance can also cover losses relating to your home and the contents inside it in the event of a covered accident.
Specifically, most homeowner’s insurance policies may cover loss or damage to your home, other structures on your property such as detached garages or approved sheds, personal property kept in your home, loss of use of the home or property, liability, and medical expenses for accidents that occur on your property. The exact terms of your coverage may vary depending on where you live. In some areas, natural disaster protection from floods, earthquakes, and windstorms require separate policies.
Payments for property and casualty insurance may be due monthly, quarterly, or an annual basis. Unlike title insurance, it renews every year and rates may increase based on prior claims or higher levels of perceived risk by the insurance company.
You Likely Need Both
Many people confuse title insurance for homeowners insurance (and vice versa), but the fact is that these two types of insurance policies cover very different risks. It’s important to understand the differences and to be aware that in most states lenders will require homeowner’s insurance in order to issue a mortgage loan. While owner’s title insurance may not be required, countless horror stories of lost ownership rights and costly legal battles make the one-time fee for title insurance extremely reasonable.
At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.
In case you missed it, check out our last Title Junction post: What Is A Certificate of Eligibility, or COE?
What Is A Certificate of Eligibility, or COE?
Are you in the market to buy a new home in the Fort Myers or Cape Coral areas leveraging a VA loan and wondering what a Certificate of Eligibility, or COE is?
The COE is the key document that verifies to lenders that someone is eligible for a VA-backed loan.
Servicemembers, Veterans and National Guard and Reserve members may apply online or through their lender; most lenders have access to the system and can verify eligibility IF the VA has records on file.
The VA also maintains a hotline for assistance.
Surviving Spouses can use VA Form 26-1817 to request determination of their eligibility for VA Loan Guarantees.
Your lender may be able to assist with processing or contact the VA for information this video did not address.
At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.
In case you missed it, check out our last Title Junction post: Loan Commitment Letter vs a Pre-Approval Letter?
Loan Commitment Letter vs Pre-Approval Letter
Trying to determine the difference between a loan commitment letter versus a pre-qualification letter for your new purchase in the Fort Myers or Cape Coral areas?
In competitive buyer’s markets where houses for sale are few and far between and homes for sale typically receive multiple offers, buyer’s need to position their offers with as much strength as possible. This may include offering fast closing dates, making offers above the asking price, and including a pre-approval letter with their offer.
At times, buyers may not understand what they need and may approach their loan officer or mortgage company with requests for a Pre-Qualification Letter or a Loan Commitment Letter. While these may sound interchangeable, they are not. These documents are different and represent different levels of due diligence and commitment by the lender. They are also used at different stages of the home buying process.
Pre-Qualification Letter
A pre-qualification letter indicates that a loan officer or mortgage company representative has reviewed some preliminary loan application information provided by the borrower either verbally or in writing, but has not yet reviewed or confirmed financial documentation. In simple terms it means that the buyer, who is also the borrower, appears to be qualified enough to apply for a loan.
Pre-qualification letters were often considered sufficient proof that a buyer was likely to get a loan. However, prequalified buyers were often not approved for loans making sellers have to renegotiate contracts or find new buyers. Today, pre-qualification letters are often found to be insufficient and pre-approval letters are favored.
Pre-Approval Letter
A pre-approval letter demonstrates a deeper level of due diligence by the lender. To receive a pre-approval letter, the lender has typically already reviewed credit reports, income documents, and bank statements. In some cases, the bank or mortgage company may enter the borrower’s data into an underwriting system that will specify if the borrower is qualified enough to move forward with the loan process. It will also provide a maximum amount the buyer can borrow from the lender.
When a buyer submits a pre-approval letter with an offer on a property, the letter will usually list the price, loan amount, down payment amount, loan-to-value, and possibly the terms of the loan. The letter will also outline what documentation is still pending from the borrower to complete due diligence in the underwriting process.
While not a guarantee a loan will be approved or funded, a pre-approval letter gives the seller and their agent strong assurance that thy buyer has the financial means to purchase the home or property for sale. In competitive markets with multiple offers, seller can review offers with pre-approval letters and chose the buyer with the most favorable terms and likelihood to get funded.
Commitment Letter
A mortgage loan commitment letter is provided by a bank or mortgage lender after the buyer has passed through a rigorous underwriting process. This type of letter is provided later in the contract time period, approximately a week or so before closing. There are still conditions to be met such as no change in the buyer’s financial landscape and a favorable appraisal. However, commitment letters are interpreted as assurance that the buyer’s loan will be approved and funded for closing.
Be Prepared
Knowing the difference between a Pre-Qualification Letter, a Pre-Approval Letter, and Loan Commitment Letter can be critical for buyers and sellers to make informed decisions during a real estate transaction.
Buyers can add strength to their offers in competitive markets with well written pre-approval letter from a reputable lender. Sellers need to know the difference so that in considering offers, they enter into contract with the buyer who offers the best contract terms and is most likely to be qualified for a loan.
At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.
In case you missed it, check out our last Title Junction post: What Can I Expect To Happen On Closing Day?
What Can I Expect To Happen On Closing Day?
Under contract for a new purchase in the Fort Myers or Cape Coral areas and curious about what you can expect on closing day?
While this video simplifies things to help you remember: you’ll present your paid homeowner’s insurance policy or a binder and receipt showing that the premium has been paid. The closing agent will then list the money you owe the seller remainder of down payment, prepaid taxes, and so on. and then the money the seller owes you unpaid taxes and prepaid rent, if applicable.
The seller will provide proofs of any inspection, warranties, and so on. Once you’re sure you understand all the documentation you’ll sign the mortgage, agreeing that if you don’t make payments the lender is entitled to sell your property and apply the sale price against the amount you owe plus expenses.
You’ll also sign a mortgage note, promising to repay the loan. The seller will give you the title to the house in the form of a signed deed. You’ll pay the lender’s agent all closing costs and, in turn, he or she will provide you with a settlement statement of all the items for which you have paid.
The deed and mortgage will then be recorded in the official public records and you will be a homeowner.
At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.
In case you missed it, check out our last Title Junction post: Why Should I Get Title Insurance?