Tips to Make Your Closing Worry Free
1. FIRE INSURANCE POLICY - Your lender will require a hazard insurance policy naming the new lender as the Loss Payee. It is your advantage to shop for best pricing.
2. PREPAID INTEREST – Interest on your new loan is paid in arrears (for example, your escrow closes June 10 - Pioneer Title will collect prepaid interest from June 9 through July 1; your first payment on the new loan is due August 1, which pays interest from July 1 to August 1).
3. LENDER REQUIRED FEES:
A. PMI (Private Mortgage Insurance) Usually 0.05 % point fee. This is required on new loans wherein a borrower puts less than 20% down towards the purchase. Expect 1 year prepaid PMI in escrow.
B. FIRE INSURANCE – One year prepaid in escrow plus 2 months deposited into an impound account.
C. REAL ESTATE PROPERTY TAXES – Depending upon the month of closing, a lender will require a property tax reserve which will include enough funds to enable the lender to pay the taxes when they become due.
D. CREDIT CARDS/PERSONAL LOANS/CAR LOANS – Depending on the loan ratio to your income, a lender may require all or a portion of your debts be paid off in escrow. They supply escrow with estimated balances, however it is your responsibility to provide Pioneer Title current billings for payment. Escrow does not check balances or recent payments made.
4. FUNDS TO CLOSE ESCROW: Funds deposited for close of escrow should be in a form acceptable to the escrow agent. We will require cashiered funds from a local banking institution or wired funds as out of town and personal checks will cause a delay in the transaction. Title companies do not accept cash.
5. CLOSE OF ESCROW – The Arizona definition of close of escrow is recordation completed with the County Recorder’s office. Signing lender and escrow documents is not closing. Following appointments by purchaser and seller to sign their individual packages, Pioneer Title returns them to the lender for review. Lenders may take 24 to 72 hours to review and fund. Following the lender deposit of funds into escrow, Pioneer Title presents the original signed documents (deed, deed of trust) to the County Recorder for recordation. Recordation is the “Close of Escrow”.
6. POWER OF ATTORNEY – If any one of the purchasers will be unavailable to sign the lender/escrow packages, notify the Realtor immediately. Your Realtor will notify your loan officer and Pioneer Title. Many lenders will accept a power of attorney signature if the title company prepares the document. The lender must always approve a Power of Attorney in advance.