#escrowtips

Escrow Process

A Smooth Easy Escrow Is Possible...

Redwood City, CA 94062:  Time and time again I have heard horror stories from home owners and home buyers claiming they didn't have an Escrow that ran smoothly. These are home buyers and sellers who had recently closed escrow on their new homes.  Even some didn't get the the final closing table and they didn't get their homes sold or purchased. When I look at the circumstances I see a consistent pattern of why this may have happened to them. These horror stories usually surround itself around MONEY.  They had to give more money than agreed at before closing. Or they just just didn't have enough to close their escrow.  In both cases this would be preventable.  Below you can read what can be done to keep these horror stories from becoming a reality.

Number one

Tell the Truth Tell the truth, the whole truth, and nothing but the truth.  Banks, Lenders, or underwriters are not letting anything slip through the cracks during any escrow.  It is just the nature of the beast for real estate loans. The truth will set you free. For examples, if you don't have a "green card", but have the money for a down payment, tell your loan officer.  If you are in the middle of a divorce and the final degree is only days away, tell your loan officer.  When you don't tell the compete story (lie) to the loan officer their underwriter will discover your secret, and it will be a good chance your loan might be denied. The computer age is here and it is robust with data about everyone and everything including YOU!  It is better to deal with a shortcoming then to "fudge the truth"  and lose everything in the end.    

Number two

Is the easiest to prevent. DON'T get any new credit, DON'T buy a new car.  DON'T enter into an agreement with a contractor by giving a  down payment on a remodel job of your new home.  DO NOT open an account at Home Depot so you will be able to repair your new fixer-upper home you have purchased.  STOP all spending, until which time your new home has been funded, and you have closed your escrow. Real simple...NO CREDIT NOW!

Number three

Read and Understand It's important to read and understand your escrow paperwork. Check and re-check your estimated closing statement to make sure there has not been a change in your fees. The most common one is when you got pre-approved for your mortgage it was for a conventional 30-year fixed rate loan. Maybe once the escrow process started you saw in the paper an FHA loan with a cheaper rate and fewer points. After further investigation you instructed your loan officer to get you into an FHA loan product.  You will believe that you were so smart and thrifty.  However, you had overlooked one thing.  You were only putting 10% down and all FHA loans require impound accounts. This is an account is paid in advance for property taxes and home fire insurance. Here in California that equates to several thousands of dollars. That's a "more-money" hiccup you might have a hard time swallowing, or maybe it will take you out of the escrow all together!  If you had done an update on your estimated HUD-1 you would have seen your  escrow closing costs were higher. You could have then either selected the new loan, or worked someway to get the extra money needed to close your escrow as agreed.

Finally, number four

Before you sign your final closing papers review your loan and escrow instructions one day before you sign them. You may spot something that can be corrected before you sit down at the closing table to sign those piles of documents. It has only happened once in my 43+ years of real estate where the buyer read every single page of their closing document right there at the closing table. And that was in the days when the documents were only 3 inches in size not the 6-8 inches one has to sign today. Ask your escrow officer to give you copies to study and read before you go into sign your closing documents.  It's difficult, usually because of your lender, but it can be done. Having a smooth escrow is not an easy task.  However, it is very doable, with proper escrow management and forethought.  I know any real estate agent, mortgage broker, escrow officer and loan officer are intelligent enough to recommend their clients properly.  It the least they can do for their clients. Home sellers and buyers are sometimes babes in the woods and need professional guidance.  If you stay involved during your escrow with those working with/for you it will be a smooth escrow What to do next?

Escrow Process

A Smooth Easy Escrow Is Possible...

Redwood City, CA 94062:  Time and time again I have heard horror stories from home owners and home buyers claiming they didn't have an Escrow that ran smoothly. These are home buyers and sellers who had recently closed escrow on their new homes.  Even some didn't get the the final closing table and they didn't get their homes sold or purchased. When I look at the circumstances I see a consistent pattern of why this may have happened to them. These horror stories usually surround itself around MONEY.  They had to give more money than agreed at before closing. Or they just just didn't have enough to close their escrow.  In both cases this would be preventable.  Below you can read what can be done to keep these horror stories from becoming a reality.

Number one

Tell the Truth Tell the truth, the whole truth, and nothing but the truth.  Banks, Lenders, or underwriters are not letting anything slip through the cracks during any escrow.  It is just the nature of the beast for real estate loans. The truth will set you free. For examples, if you don't have a "green card", but have the money for a down payment, tell your loan officer.  If you are in the middle of a divorce and the final degree is only days away, tell your loan officer.  When you don't tell the compete story (lie) to the loan officer their underwriter will discover your secret, and it will be a good chance your loan might be denied. The computer age is here and it is robust with data about everyone and everything including YOU!  It is better to deal with a shortcoming then to "fudge the truth"  and lose everything in the end.    

Number two

Is the easiest to prevent. DON'T get any new credit, DON'T buy a new car.  DON'T enter into an agreement with a contractor by giving a  down payment on a remodel job of your new home.  DO NOT open an account at Home Depot so you will be able to repair your new fixer-upper home you have purchased.  STOP all spending, until which time your new home has been funded, and you have closed your escrow. Real simple...NO CREDIT NOW!

Number three

Read and Understand It's important to read and understand your escrow paperwork. Check and re-check your estimated closing statement to make sure there has not been a change in your fees. The most common one is when you got pre-approved for your mortgage it was for a conventional 30-year fixed rate loan. Maybe once the escrow process started you saw in the paper an FHA loan with a cheaper rate and fewer points. After further investigation you instructed your loan officer to get you into an FHA loan product.  You will believe that you were so smart and thrifty.  However, you had overlooked one thing.  You were only putting 10% down and all FHA loans require impound accounts. This is an account is paid in advance for property taxes and home fire insurance. Here in California that equates to several thousands of dollars. That's a "more-money" hiccup you might have a hard time swallowing, or maybe it will take you out of the escrow all together!  If you had done an update on your estimated HUD-1 you would have seen your  escrow closing costs were higher. You could have then either selected the new loan, or worked someway to get the extra money needed to close your escrow as agreed.

Finally, number four

Before you sign your final closing papers review your loan and escrow instructions one day before you sign them. You may spot something that can be corrected before you sit down at the closing table to sign those piles of documents. It has only happened once in my 43+ years of real estate where the buyer read every single page of their closing document right there at the closing table. And that was in the days when the documents were only 3 inches in size not the 6-8 inches one has to sign today. Ask your escrow officer to give you copies to study and read before you go into sign your closing documents.  It's difficult, usually because of your lender, but it can be done. Having a smooth escrow is not an easy task.  However, it is very doable, with proper escrow management and forethought.  I know any real estate agent, mortgage broker, escrow officer and loan officer are intelligent enough to recommend their clients properly.  It the least they can do for their clients. Home sellers and buyers are sometimes babes in the woods and need professional guidance.  If you stay involved during your escrow with those working with/for you it will be a smooth escrow What to do next?

Escrow Process

A Smooth Easy Escrow Is Possible...

Redwood City, CA 94062:  Time and time again I have heard horror stories from home owners and home buyers claiming they didn't have an Escrow that ran smoothly. These are home buyers and sellers who had recently closed escrow on their new homes.  Even some didn't get the the final closing table and they didn't get their homes sold or purchased. When I look at the circumstances I see a consistent pattern of why this may have happened to them. These horror stories usually surround itself around MONEY.  They had to give more money than agreed at before closing. Or they just just didn't have enough to close their escrow.  In both cases this would be preventable.  Below you can read what can be done to keep these horror stories from becoming a reality.

Number one

Tell the Truth Tell the truth, the whole truth, and nothing but the truth.  Banks, Lenders, or underwriters are not letting anything slip through the cracks during any escrow.  It is just the nature of the beast for real estate loans. The truth will set you free. For examples, if you don't have a "green card", but have the money for a down payment, tell your loan officer.  If you are in the middle of a divorce and the final degree is only days away, tell your loan officer.  When you don't tell the compete story (lie) to the loan officer their underwriter will discover your secret, and it will be a good chance your loan might be denied. The computer age is here and it is robust with data about everyone and everything including YOU!  It is better to deal with a shortcoming then to "fudge the truth"  and lose everything in the end.    

Number two

Is the easiest to prevent. DON'T get any new credit, DON'T buy a new car.  DON'T enter into an agreement with a contractor by giving a  down payment on a remodel job of your new home.  DO NOT open an account at Home Depot so you will be able to repair your new fixer-upper home you have purchased.  STOP all spending, until which time your new home has been funded, and you have closed your escrow. Real simple...NO CREDIT NOW!

Number three

Read and Understand It's important to read and understand your escrow paperwork. Check and re-check your estimated closing statement to make sure there has not been a change in your fees. The most common one is when you got pre-approved for your mortgage it was for a conventional 30-year fixed rate loan. Maybe once the escrow process started you saw in the paper an FHA loan with a cheaper rate and fewer points. After further investigation you instructed your loan officer to get you into an FHA loan product.  You will believe that you were so smart and thrifty.  However, you had overlooked one thing.  You were only putting 10% down and all FHA loans require impound accounts. This is an account is paid in advance for property taxes and home fire insurance. Here in California that equates to several thousands of dollars. That's a "more-money" hiccup you might have a hard time swallowing, or maybe it will take you out of the escrow all together!  If you had done an update on your estimated HUD-1 you would have seen your  escrow closing costs were higher. You could have then either selected the new loan, or worked someway to get the extra money needed to close your escrow as agreed.

Finally, number four

Before you sign your final closing papers review your loan and escrow instructions one day before you sign them. You may spot something that can be corrected before you sit down at the closing table to sign those piles of documents. It has only happened once in my 43+ years of real estate where the buyer read every single page of their closing document right there at the closing table. And that was in the days when the documents were only 3 inches in size not the 6-8 inches one has to sign today. Ask your escrow officer to give you copies to study and read before you go into sign your closing documents.  It's difficult, usually because of your lender, but it can be done. Having a smooth escrow is not an easy task.  However, it is very doable, with proper escrow management and forethought.  I know any real estate agent, mortgage broker, escrow officer and loan officer are intelligent enough to recommend their clients properly.  It the least they can do for their clients. Home sellers and buyers are sometimes babes in the woods and need professional guidance.  If you stay involved during your escrow with those working with/for you it will be a smooth escrow What to do next?