A: The length of an escrow can vary widely depending upon the terms agreed upon by the parties. All of the above require time for scheduling, completion, and review of the findings. These recommended inspections can usually be completed in 10 to 12 days. If a buyer requires financing, additional time will likely be required in order to complete a property appraisal plus other lender requirements. Meanwhile, at the title company, the chain of title and other matters of record are scrutinized so the buyer can be confident he will receive a clear title.
All of the above can be accomplished within 25 to 30 days of a "typical" escrow period. George Bassett ,. Executive Brokers Real Estate Group , , georgebassett pacbell. A: Our typical escrow period, in the Bay Area for a mortgage-funded purchase is between 24 and 30 days. Once the buyers and sellers have entered escrow, the mortgage lender will order a home appraisal.
This helps prevent a situation where the home loan exceeds the value of the property. Title search. When you have the title to something, you own it. As part of the escrow process, a title company will usually check to ensure that there is a clear chain of ownership, with no liens or court filings that might prevent a sale.
Document preparation. The mortgage lender produces a variety of documents relating to the home loan, and delivers them to the escrow agent or company. A few days before closing, the buyer will receive a disclosure document that shows the amount due at closing. Check out our A-to-Z list of mortgage documents. Time to close!
This is the final step in the California escrow process, and the most important. At this stage, the home buyer will provide a check for the closing costs that are due. Buyer s and seller s will sign a variety of documents relating to the sale. Rather than paying taxes directly to the government and insurance premiums to the insurer, an FHA borrower pays one-twelfth of these expenses each month, in addition to his mortgage principal and interest payment, into the account.
The escrow account holds this money until the bills become due at the end of the year. At this point, monthly escrow payments for the following year are adjusted up or down based on whether there was a shortage or surplus in the account for the current year's payment. Mortgage-holders are obligated to send you an annual statement regarding the activity of your escrow account, which may also be referred to as a mortgage impound account.
Why all this? Because, to put it crudely, FHA loan applicants are considered higher risk: They often have lower credit scores, smaller incomes, and fewer assets—all the reasons they are seeking FHA loans, which have less stringent requirements for borrowers than conventional mortgages. But it wants to ensure the bills get paid, hence, the escrow-account mandate. Your real estate agent will oversee this entire escrow process, so don't be too concerned if you don't understand every detail.
However, in any transaction where you're putting so much on the line financially, it's a good idea to have at least a basic idea of what's going on so you won't get taken advantage of—or inadvertently lose your home.
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