For Lenders

A deed is a physical legal document used to transfer the ownership of an asset (like a house or land) to a new owner.

A government issued photo ID (driver’s license, passport or military ID).  A wire transfer is required for all funds due from you at closing.  We will let you know in advance if additional documents are needed.

Purchase closings take generally 30-45 minutes, Seller signed documents take generally 20 minutes and for a refinance you can generally expect 20-30 minutes.

Absolutely.  We offer multiple options for closings including a traditional in person closing at one of our eight office locations, a mobile notary or remote online notarization.

No.  Under the laws of the Commonwealth of Virginia (Sections 55-525.18 and 55-525.19) a title company can process your real estate closing for you.  There are many advantages to working with a title company.  Because closings and title insurance are all we do we tend to be more flexible and accommodating to your schedule.  We can often work more efficiently and are more cost effective.

Many properties are located in areas that are subject to protective covenants. Protective covenants outline rules and restrictions for the neighborhood or development. The goal of the covenants is to protect the integrity of the neighborhood and to preserve property values.

Covenants are generally recorded at the county courthouse, and everyone who buys property in the neighborhood after the covenants are recorded is subject to the covenants. Developers or neighbors often form homeowners associations to further the goals set out in the covenants, to collect dues from the property owners, to maintain common areas, and to enforce rules and regulations.

At closing, unpaid association dues from previous years are the responsibility of the seller. Association dues for the current year are prorated between the buyer and seller. Future dues are the responsibility of the buyer, and future dues are not typically held by the lender in an escrow account.

An escrow account contains funds held by a lender for future payment of property taxes and applicable insurance, such as homeowner/hazard insurance, flood insurance, and/or mortgage insurance Private Mortgage Insurance . Lenders utilize escrow accounts to ensure that the loan collateral is protected from losses resulting from tax sales for unpaid taxes or lack of insurance coverage due to unpaid premiums.

At closing, taxes for the current year are pro-rated, and the buyer pays up-front for a homeowners insurance policy for one year. The closing attorney or settlement agent establishes the escrow account on behalf of the lender to pay future tax bills and insurance renewals.

The lender does not pay interest on the funds held in escrow, and the lender does not charge a fee to manage the account. Lenders analyze the escrow account annually to prevent holding too much money, and the amount a borrower pays into the account each month can change to avoid accumulating overages or shortages.

The lender will generally calculate the tax escrow based on the tax bill used for prorations at closing. Sometimes, however, the tax assessment used for proration purposes is obviously much lower than future tax assessments will be – for example, cases where prorated taxes were based on unimproved property, or prorated taxes were calculated with exemptions no longer applicable for the new buyer. In such cases, the closing agent will calculate an estimated future tax bill based on formulas set forth by the taxing authority. The estimated future tax amount is then used to establish the escrow account.

Insurance escrows are based upon the known guaranteed renewal premium. If a renewal premium is not known or guaranteed, the escrows will be based on the annual premiums for the current year.

At closing, the settlement agent makes an initial deposit into the escrow account to set it up. The borrower then continues to make ongoing monthly deposits into the account with each monthly mortgage payment. When taxes or insurance renewal premiums become due, the account will pay out these items, and a cushion remains in the account going forward.

Property owners are obligated to pay city, county, and/or state ad valorem taxes. Nonpayment of such taxes will result in a lien on the property. The county tax assessor periodically determines the value of the property, and taxes are assessed on the appraised value of the property. Depending on the city, county and/or state in which the property is situated, there may be exemptions for which the property owner can apply which reduce the tax bill.

At closing, the seller is responsible for paying delinquent property taxes for previous years. Taxes for the current year are prorated between the buyer and seller on the settlement statement. Generally, the lender requires the settlement agent to establish an escrow account to pay taxes for future years.

In calculating taxes for closing, settlement agent will base prorations upon the current year’s tax bill. If the tax bill for the current year has not been issued, the proration of taxes will typically be based upon the previous year’s tax bill. The amount of the charge to one party and the credit to the other is determined by dividing the annual tax bill by 365 (for the daily amount) and then multiplying that amount by the number of days before closing (for the seller) and after closing (for the buyer).

In closings involving new construction, the current tax bill may be dramatically less than future tax bills are expected to be. This happens because the most recent tax assessment was likely based on unimproved property. The tax assessor will eventually reassess the property and base taxes on the improvements. In such cases, the settlement agent will use the current lower tax bill for prorations between the buyer and seller, and the closing agent will use an estimated future tax amount to establish the escrow account.