CLOSING A HOME
What to Expect with Escrow
Bring your driver’s license or government issued photo ID (military ID, passport, etc.) and your social security number or green card to closing. Copies will be made at closing.
State law mandates that Title companies disburse on “collected funds.” Therefore, it is now required that all funds be wired from respective financial institutions. All other forms of payment, like Cashier’s Checks, require clearing of funds that can take 3 to 5 business days and ARE NOT deemed to be collected funds that can be disbursed to pay outstanding mortgages, Realtor commissions, lender fees, recording fees, etc.
Married, Separated or Divorce Status
There can be a lot of confusion in Florida as to who is required to attend closing and sign documents when it comes to marital status. Florida is a Homestead state, meaning that unless you are purchasing investment property your spouse will need to attend the closing, provide proper identification and be prepared to execute documents.
If you are obtaining a mortgage and your spouse is not on the loan they will still need to attend closing, provide proper identification and be prepared to execute documents. For example, the lender will still require both signatures on the mortgage (not the promissory note) creating the collateral interest in the Homestead property.
We often see confusion as to marital status when it comes to Separated vs. Divorced. The best way to look at this is – In the eyes of the law are you still married? Legally, if you are separated but the divorce is not final, in the eyes of the law you are still married and your spouse will be required under the law to attend closing and sign as the spouse with all rights, responsibilities and duties.
Every person who has legal tie to real property in Florida and who resides on the property on January 1 and in good faith makes it their permanent home is eligible for a homestead exemption and saving on their taxes. Simply Google the Property Appraiser’s Office in the county in which your property is located for filing requirements, tax savings and timelines.
Unless you are in the Title and closing business, these are all the activities no one else thinks about! We are not only responsible for getting all parties to the closing table with the proper documents and funding but continue post-closing to ensure all outstanding mortgages and liens are paid timely, that the satisfaction of mortgage is recorded by the prior lenders, that all mortgage and deeds are timely recorded and the Title Insurance policies are issued to the new Owner and Lender.
Several weeks after the closing, the new buyers will receive their Owner’s Title Policy from our team. You should file this with your other closing documents and store in a safe place. These documents will be very useful and can save you time and money when you look to sell or refinance your existing mortgage. For instance, in the event of a refinance, proof of your prior Owner’s Policy qualifies you for reissue discount which dramatically reduces your related closing costs. Simply give us a call back and we can assist you through all future transactions!
Typical Documents You Will See At The Closing Table
Loan Estimate (LE)
Effective October 3, 2015, the Loan Estimate (LE) will replace the old Good Faith Estimate (GFE) and the early Truth In Lending Disclosure (TIL.) The LE is a three page written estimate provided by the lender of all charges – including closing costs and pre-paid and escrowed items – which you are likely to pay at closing. You should receive the LE within three business days of making your loan application and no later than the seventh business day before closing.
Good Faith Estimate (GFE)
Applicable to loans applied BEFORE October 3, 2015. A written estimate provided by the lender of all charges – including closing costs and pre-paid and escrowed items – which you are likely to pay at closing. You should receive this within three days of submitting your loan application. Sweet Settlements LLC provides real time quotes to lenders for the purposes of generating their GFE’s at time of the loan application and we guarantee fees will not exceed the quote! All of our customers like that!
Truth In Lending (TIL)
Applicable to loans applied for BEFORE October 3, 2015. Your TIL will state your Average Percentage Rate or APR. The APR is always higher than the loan’s interest rate because it reflects the entire cost of financing our loan. The APR factors in all your related expenses (closing costs plus interest) and restates it in an adjusted combined interest rate format.
This is your promise to pay back a specific amount of money over a stated period of time with interest. This document is the primary evidence of your debt.
The difference in terminology between a Mortgage and a “Mortgage” or Promissory Note or Loan is very confusing to most. The Mortgage is the instrument that pledges the property as security (collateral) for a debt. The Mortgage document allows the lender to take possession of the property if the borrow fails to pay off the promissory note or loan. To add to the confusion, in many states outside of Florida this mortgage/collateral document is referred to as the “Deed of Trust.”
HUD-1 Closing Statement
BIG CHANGE! The HUD-1 Closing Statement will no longer be used on all new consumer financed real estate transactions after October 3, 2015. The new Closing Disclosure Form (CDF) will replace the HUD-1 Closing Statement and is explained below. We have retained this reference section for the HUD-1 Closing Statement because the form may still be used going forward on these types of transactions: home-equity lines of credit, reverse mortgages, mortgages secured by a mobile home or dwelling not attached to land, commercial loans and loans made by a creditor who makes five or fewer mortgages in a year.
The HUD-1 Closing Statement provides a detailed and itemized breakdown of all costs and disbursements associated with the sale or refinancing of the property. This document is really the heart of the fiduciary responsibility that is provided by a Title and closing company. As your Title Company, we have the responsibility to insure the integrity of the transaction by accurately tracking and reporting all funds and charges tied to the transaction. Our fiduciary responsibility expands to ALL parties in the transaction…not only protecting the buyers and sellers interests, but closing within the terms of the lender’s instructions and sales contract.
Closing Disclosure Form (CDF)
Effective October 3, 2015, the Closing Disclosure Form (CDF) replaces and integrated the Truth In Lending (TIL), Good Faith Estimate (GFE) and HUD-1 Closing Statement. The CDF is a five page written document that summarizes the entire financed real estate transaction. Page 1 covers general information, loan terms, projected payments and costs of closing; Page 2 covers loan costs and other costs; Page 3 calculates your cash to close; Page 4 provides additional information about the loan and Page 5 includes other loan calculations, other disclosures and all parties licensing and contact information.
ANOTHER BIG CHANGE! The CDF MUST be delivered to the buyer/borrow Three (3) business days before closing. A business day here is defined as everyday but Sunday and federal holidays. This rule is a hard and fast. If timely disclosure cannot be documented by the lender, the transaction will NOT CLOSE on the assigned date.