What
to Expect – Your Property & Closing
Property
Appraisal
An appraisal is required to determine the value of the property
you are purchasing or refinancing. An appraisal is a written
report of the value and description of the property and is
written to meet national standards.
An appraiser will inspect the interior and exterior of the
property. Then, a comparison of recently sold properties within
the surrounding area will be performed and included in the
appraisal. If your property is used for investment purposes,
the appraiser will consider the potential rental income of
the property. Back
to contents Copy
of the Appraisal
After we receive the appraisal, we can provide you with
a copy of it.
Back
to contents Condominium
Property
There are some additional requirements with respect to
condominiums. The project your condominium is located on
must be complete before financing can be offered. This
is to ensure all units are of the same quality and that
your appraised value holds. Another consideration is the
number of owner occupied units versus non-owner occupied
units for this may impact the future marketability of your
property. Many times, people prefer to purchase units in
condo complexes that are primarily owner occupied.
Back
to contents Home
Inspections & Appraisals
It is wise to obtain both a home inspection and an appraisal.
Both are designed to protect your financial interest and
investment. They can identify potential problems and issues
with the property that could create a hardship for you
in the future.
Although the appraisal will note any construction problems,
a home inspection will determine internal and external
construction problems in greater detail. In essence, the
home inspection will educate you about possible issues
and defects with the home.
It’s best to be present at the time of the home
inspection so that you can ask questions of the expert.
This is the time to learn about the home’s fixtures,
appliances, and major systems. Back
to contents Flood
Insurance
This is insurance in addition to your regular home insurance
policy. Federal Law requires all lenders to determine if
the property that is being financed falls in a flood hazard
zone. If the answer is yes, then you must add flood insurance
coverage to your policy. This is to ensure that you will
be covered for damages in the event of loss due to a flood.
Back
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Closing
The
loan closing will usually take place at the credit union’s attorney’s
office or at the credit union. Sellers may be present
at the closing if it is a
purchase. During the closing, you will review and sign
numerous documents. The closing attorney will describe
each document and answer any questions you have.
Some of the most common and important documents you will
review and sign are:
HUD-1
Settlement Statement: This document is an itemized
list of the fees assessed in connection with your mortgage
loan. If you are purchasing a home, the document will also
list any fees between you and the seller. If you are refinancing
a home, it will include the payoff amounts of your mortgage
and/or debts that will be paid in full with this new loan.
Truth-In-Lending
Statement: This document, mandated by
Federal Law, discloses the terms and conditions of a mortgage.
It includes the annual percentage rate (APR) and other
fees. You will notice that this document is the same as
the HUD-1 but it will reflect the final rate and fee information.
Note: This document, upon signing, legally binds you to
the terms and conditions of repaying back the mortgage.
The Note will include the amount of the loan, the rate,
the term, the amount of your monthly payment, and the penalties
incurred in the event of default.
Mortgage/Deed
of Trust: This document pledges a property
to the lender as security for repayment of the debt. Simply
stated, in the event of a default, the property will be
turned over to the lender.
Right
of Rescission: If you are refinancing, Federal Law
requires that you have three days to decide if you want
the new mortgage after signing all the documents. The credit
union will not disburse the loan funds until the three
business days have passed.
Back
to contents Attorney
The
credit union will have an attorney present to review and
sign the documents with you. This attorney represents the
credit union during the closing. You have the option of having
your own attorney present if it makes you more comfortable.
In some cases, you may be required to have your own attorney
present.
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