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What To Expect When You're Closing in Central Jersey
First, a little about "escrow". When you're closing on your new house, an escrow holder is used to assure the transaction will close appropriately and in a certain amount of time. A property is said to be in escrow when in the closing process, funds is held by a third party on behalf of two parties when the transaction is taking place. For example, in an online purchase, PayPal is the secure third party that obtains the buyer's money, and then sends the money to the seller.
The escrow holder makes sure that the terms and conditions of the agreement between the seller and buyer are performed in preparation of the sale being completed.
Escrow companies collect the following legal documents:
- Fire and other insurance policies
- Title insurance policies
- Terms of sale and any seller-assisted financing
- Requests for payment for various services to be paid out of escrow funds
- Loan documents
- Tax statements
Closing on the property happens when all of the procedures of the escrow are complete. At this time, all payments and dues for inspections, title insurance and real estate commissions are collected. You'll then get the title to the property and the title insurance gets issued as stated in the escrow instructions.
The escrow holder gets a payment when the closing is complete. You'll know when it's time to submit the form of payment.
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The Escrow Holder Will: |
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The Escrow Holder Won't: |
- Assemble escrow instructions
- Petition title inquiry
- Comply with the bank's standards as noted in the escrow agreement
- Intake payments from the buyer
- Prorate tax, interest, insurance and other fees according to guidelines
- Record deeds and other documents as instructed
- Request title insurance policy
- Close escrow when all instructions of seller and buyer are met
- Disburse payments and finish instructions
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- Give advice - the escrow holder must stay at a fair, third-party status
- Dispense opinions about the outcome of your taxes
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Mortgage Escrow Account
A Mortgage Escrow Account is started to pay rolling expenses while there is a loan on the house. Though most home buyers make payments via their monthly mortgage payment, Escrow Accounts are deposited into at closing as well.
This is a quick run-down of the escrow process. Your individual plan will be slightly different based on your bank and your escrow agent.