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Below are the most common types of information and documentation required at a closing. Other items may be required as a result of your particular circumstances. Please check with your lender to determine if other requirements exist. In preparation for a refinance closing, click here.
Loan Information for Existing Mortgages or Liens
Your new mortgage lender must receive a first mortgage on your property. Consequently at closing, all other mortgages or liens, including home equity lines, must be paid off or subordinated. To help ensure your closing is not delayed unnecessarily, provide Realty Title with the lender's name, address, telephone number and loan number as soon as possible. Provide information regarding tax liens or utility financing statements. Some mortgage lenders require a written request before releasing payoff information.
Payoffs Other than Mortgages
Sometimes other creditors, like lenders with credit cards or unsecured lines of credit, must be paid off at the closing, either to consolidate debt or to qualify a party for the new loan being made. Information regarding these accounts, such as lender's name, address, telephone number and account number should be provided as soon as possible.
At the closing, your lender may required a current (within 30 - 90 days, depending on the form), letter from a licensed pest exterminating company stating that there is no active infestation of termites and that there is no damage from prior infestation (or in the case of damage, that such damage has been corrected). Typically, the seller (in the case of a purchase) or the borrower (in the case of a refinance) will obtain this letter; however, the contract for sale may provide otherwise.
Some lending programs require a current (within 60 - 90 days) survey or mortgage loan inspection (MLI) of your property. This drawing serves to locate the improvements on the land for the lender's purposes only. A MLI is not a boundary survey and should not be relied on for locating exact property lines. If an MLI is required, the lender or closing agent will order the MLI from a licensed surveyor early in the closing process. If a survey or MLI of your property has recently been made, advise the closing agent immediately so that it can be updated into a form acceptable to your lender and the title insurance company. If the lender does not require a survey or MLI as part of the loan documentation, and you would like to have one made, please advise the title company as soon as possible.
If the flood determination obtained by your lender indicates that any portion of the property is located within a flood zone, a policy of flood insurance may be required by your lender. Your regular insurance agent will be able to provide information on flood insurance and this information should be provided to the closing agent as soon as it is available. The first year's premium will be paid in advance at the closing and monthly escrow payments will be included in your payment to the lender.
Your mortgage lender will require that you have a hazard insurance policy insuring the house against fire and other casualties in an amount not less than guaranteed replacement value. Binders or commitments to insure are not acceptable. Some lending programs require new policies on refinances; others require only a certified copy of the existing policy and an endorsement changing the loss payee of the policy to show the name and address of the new lender. The first year's premium will be paid in advance, either at the closing or outside the closing (then a paid receipt must be provided) and monthly escrow payments will be included in your payment to the lender. In order to make sure all your new lender's requirements are met (proper premium and coverage amount, correct loss payee name and address, etc.), you should advise your closing agent before the closing of the name and telephone number of your insurance agent. Condominiums are generally insured through the homeowners' association.
If the property being purchased or refinanced is not connected to a sewer, some lenders will require that the local health authority provide a current certification that the house is served by a properly constructed and operating septic tank system. The local county health department will have the proper form and know the proper procedures. For FHA and VA loans, the letter must state that public sewers are not available, and other special requirements may apply. Ask you lender for these requirements. Normally, the seller (in the case of a purchase) or the borrower (in the case of a refinance) will obtain this letter. In order to avoid a last minute discovery at closing that the letter obtained is inadequate or unacceptable, you should provide it to the closing agent in advance of the closing, preferably as soon as it is obtained. Even if the lender does not require a septic letter, your contract may provide otherwise.
If the property being purchased or refinanced is not connected to a public water supply, a current letter from the local health authority may be required stating the water quality is satisfactory and that the water quantity supplied by the pump and storage system is adequate and reliable. A copy of the test which shows that treatment is unnecessary may be required. Normally, the seller (in the case of a purchase) or the borrower (in the case of a refinance) will obtain this letter. In order to avoid a last minute discovery at closing that the letter obtained is inadequate or unacceptable, you should provide it to the closing agent in advance of the closing, preferably as soon as it is obtained.
Many contracts provide that a one-year warranty be furnished to the purchaser at closing. The warranty, which is most often paid for by the seller, covers systems and appliances in the house for a period of one year, subject to the terms of the agreement. Your agent will be able to answer any questions which you may have about the warranty.
Power of Attorney
If a party to the transaction is unable to be present at the closing, a power of attorney may be used, subject to lender and title underwriter approval. Please contact the title company as soon as you know that a power of attorney may be necessary.
Conditions at Closing
New loan approval may be granted to a borrower, subject to satisfaction of certain conditions which may include the sale of a previous residence, liquidation of a stock or other investment account, and/or payment of outstanding credit accounts. Borrowers should check with the lender before closing to ascertain whether any such requirements exist and to satisfy those requirements.
Cashier's Check / Wire Transfer
If a party (buyer or seller) is required to bring funds to the closing table, these funds must be in the form of a cashier's check (for funds under $10,000) made payable to "Realty Title & Escrow", not a personal check. Funds over $10,000 must generally take the form of a wire transfer into the title company's escrow account. Please call your closing agent for wiring instructions to proceed with this form of funds. Funds that are not "good funds" (cash equivalent or immediately recognized as "collected" funds) may cause a delay in disbursement at closing.
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