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The Loan Process
Part 7 – Recording! Recording the loan documents is the last part of the
loan process. After your careful review of the loan documents you
meet with the escrow officer of the Title Company to sign your loan documents. Escrow officers are professionals, and act as a
neutral third party to all involved in the transaction. Throughout the transaction, the escrow holder may
deal with up to twenty-eight different parties. Therefore, escrow officers have to be detail
oriented. Escrow officers are almost always a notary public.
They will witness your signature (about a dozen or more times) as you go
whisking through, signing the documents. I say “whisking” because I know you were careful
to review those loan documents carefully, and you know what you’re signing,
right? Right. If you’re “refinancing” a property, and you
occupy the property you are refinancing, you
have three full business days to rescind, if you choose to. Saturdays count as a business day to lenders, even
though they’re not working that day. If you are “refinancing” an investment property, you do
not have the “three-day right of rescission”. If you are “purchasing” a property to live in, you
do not have a three-day right of rescission either. In a refinance transaction, you may or may not have
funds due the escrow account, prior to the close of escrow. If purchasing, you will be required to put into
escrow any balance owed, i.e., down payment or closing costs. This is required to be in the form of a certified check or a wire, personal checks are not generally accepted. For most, a home is the single largest investment in
one’s lifetime. For this reason, it’s not at all uncommon to experience some
good ol’ buyer’s remorse. Confidence is paramount right now, and although I am
sincerely sympathetic, you most certainly risk the loss of all or most of your
earnest deposit money if you succumb to buyer’s remorse and back out. Once you sign the loan documents, the Escrow officer
prepares the documents to be returned to the lender that night, Fed-X. It can take from twenty-four to seventy-two hours for
the lender to review all the documents, before they fund the loan. Disbursement from the lender will be by wire to the
Title Company, which in turn will be in strict accordance with the “Closing
Statement” otherwise known as the HUD-1. Nearly always, the Trust Deed is recorded in the
County Recorder’s office the day after
the loan has funded. In some unusual cases, loans can be funded and the
Trust Deed recorded the same day. Consequently, it is important to instruct your
Realtor (if a purchase), or your loan agent (if a refinance), to plan the
loan’s recording date a.k.a., close of escrow date to be on a Tuesday,
Wednesday, or Thursday. The reason? If you are purchasing, and the loan is funded on a
Friday, or before a three-day weekend, you will be paying interest on a loan for
two, or three, or even four days, on a home that you don’t even own yet! If you are refinancing, you’re even worse off. You will be paying interest on two loans at the same
time. The new loan, and the one you are refinancing out of. Check the close of escrow date, plan ahead, and
relax… you’re almost home.
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