PMI, ESCROW, and getting the keys!
Don’t let these terms become too complicated! Learn exactly what they mean and how it fits in your process to buying your new home:
The next step in the process is to secure insurance. The two types of insurance you’ll rely on during this process are Private Mortgage Insurance (PMI) and Title Insurance. PMI allows you to qualify for a mortgage with a down payment as low as 3% and is:
- required by the lender to protect them against losses due to foreclosure
- cancelled once you have at least 20% equity in your home
- paid either annually, monthly or as a single premium plan
Title Insurance ensures that the rights and interests to the property are what you expected. It protects you from future ownership claims against your property. It:
- requires only one premium
- protects you by ensuring the insurance company will defend the title in court, if necessary, at no cost to you and bear the cost of settling the case.
Speak to your trusted realtor to learn more about how these insurance policies protect your financial security.
An escrow is the process where the buyer and seller deposit written instructions, documents and funds with a neutral third-party. These remain with the escrow company until certain conditions are fulfilled, and the company mediates all transactions.
The escrow process begins once a Purchase Agreement has been signed, and your realtor opens escrow with a reputable company. This process involves the following key parties:
- You, the buyer
- Lending Institution
- Real Estate Agent/s
Additionally, the following parties may become involved:
- Home Inspector
- Pest Inspector
- Appraisal company
- Home Warranty company
The escrow company will hold:
- any contracts drawn up between you and the seller
- any funds, such as deposits.
Closing the escrow process means you become the owner of the title deeds. Your realtor will guide you through this closing process, which includes informing your escrow officer how you’d like to hold title.
Getting the keys
Finally! You’ve closed escrow, the title deeds are on their way, and you’re issued with the keys to your new home. Well done!
However, there are a few things to take care of before you’re able to settle in. These include:
- receiving your title deeds and insurance policies (mailed to you by your escrow agent)
- receiving your loan coupon book/statement and preparing for your first payment
- preparing for your first payment of property taxes
- acknowledging any home warranty and attending to possible repairs.
Once these last loose ends have been tied up, you can settle in to enjoy your new space with peace of mind.
It doesn’t need to be! A trusted realtor will make the process easier. Team Barnum has been in the real estate business for over 32 years. As stalwart members of the Arizona community, we’re ready to share those special details that “only the locals know”. Let’s work together to find that perfect next home for you and your family.