Closings FAQ
WHAT DO YOU MEAN BY “CLOSING”?
For a Purchase transaction, the "Closing" is a meeting of the Buyer and the Seller, their respective Attorneys and the Real Estate Agents. At the Closing, the Buyer will receive the Warranty Deed to his/her new home, and the Seller will receive the purchase price, after deducting any mortgages and other expenses the Seller owes. The Closing usually takes place at the office of the Buyer's Attorney or the Mortgage Lender. At the Closing, your real estate Attorney will be present to discuss any last-minute issues and to conduct the Closing. In most cases the Buyer's Attorney will also be representing the Mortgage Lender, and will guide the Buyer through the many documents that Lenders require. For a Refinance, the "Closing" is a meeting with the borrower and the closer, in which the borrower signs the necessary loan documents.
WHAT IS A MORTGAGE CONTINGENCY?
Many Real Estate Contracts are “contingent” on the Buyer’s ability to get a mortgage loan in the desired amount. They provide that the Buyer has until a specified date to obtain a mortgage commitment, and if the Buyer fails to obtain a commitment, the Buyer can back out of the contract and receive a return of any deposit monies previously paid. It is important for the Buyer to keep this date in mind, because if the Buyer fails to give the Seller written notice of any decision to withdraw on or before the specified date (or any extension that has been agreed to by the Seller in writing), the Buyer will be in danger of forfeiting your deposit.
WHAT IS A TITLE SEARCH?
Searching a title involves the professional searcher visiting the town hall where the property is located and personally checking all relevant public records relating to the property. Connecticut Closings will arrange a title search of the home you are buying or refinancing. The purpose of the title search is to verify the present ownership of the home you are buying or refinancing, and to determine the existence of any mortgages, liens, or other matters that affect the rights of ownership to the property. Connecticut Closings will review the title search report in detail. If the title search report reveals a defect or problem, Connecticut Closings will advise you and discuss the alternatives.
WHAT IS A TITLE INSURANCE POLICY AND WHY DO I NEED ONE?
Title insurance insures that you’re getting title to your property without any mortgages, liens or adverse claims against it. Most liens are discovered by the title search, and are dealt with at Closing. But some liens or other rights might not be apparent to the title searcher. For example, Mechanic’s Liens can be filed by a contractor who provided services or materials to the house up to 90 days after the work was completed, even if you purchased the house in the meantime! Other things covered by title insurance include the effects of lost or misfiled deeds, liens for unpaid estate taxes, deeds signed by minors, and a number of other irregularities that sometimes occur. With title insurance, if anything like this arises, you simply contact the title company and they do what it takes to resolve the matter.
All Mortgage Lenders require a Lender's Title Insurance Policy to protect their interest in the event of a title problem. The premium is paid by you, the Borrower/Buyer, and is paid at the Closing.
WHY DO I NEED AN OWNER’S TITLE INSURANCE POLICY?
The policy required by your lender only covers their interest. So, for example, if you bought a $200,0000 house and got a $160,000 mortgage loan, you’d have paid $40,000 of you own money to get the house. If there is a title claim that is resolved for $40,000 or less, you would have to pay that yourself. The Lender’s policy only takes effect when their interest is affected. For a relatively small extra premium, you can obtain an “Owner’s Policy”, which will insure your $40,000 interest as well.
WHY DO YOU ALSO REPRESENT THE MORTGAGE LENDER?
Banks and other mortgage lending companies require legal representation in connection with loan closings, at the expense of you, the Borrower, and they will only use attorneys that have qualified to represent them and are on their "approved attorney list". Connecticut Closings, LLC is owned and operated by the attorneys and paralegals of Collins, Deans & Melocowsky, and they are on the “approved attorney list” of virtually all area lenders. When you hire us, you’re also hiring Collins, Deans & Melocowsky to represent the lender’s interest.
Since you also need legal representation in connection with your transaction, it is customary in this area for the same attorney to represent the lender and the borrower. This cuts down on costs and is more efficient. The fees we quote you include this dual representation.
