Why Do You Need a Lawyer?

The closing of your new home will be scheduled with a local attorney who has been approved by your mortgage company. This attorney should be experienced in all matters pertaining to real estate, and have a good working knowledge of the procedures and requirements of mortgage lenders in your area. The attorney should also have available title insurance from an A-1 rated Title Insurance Company. The closing attorney’s primary function is to ensure that ’good title" to the property is being transferred. This involves title research wherein the attorney will examine probate records, surveys, plats, and other legal documents. If there are no defects in the chain of title, the attorney will issue a title insurance policy, guaranteeing a proper title transfer. This "Lender’s Policy," or "Mortgagee Policy", is required by the mortgage lender. An owner’s policy can be purchased simultaneously at closing, which will protect your interest in the property. Conversely, if defects in the title exist, your closing attorney will attempt to correct the errors, so that a good title can be transferred. Should problems develop during the title examination, the attorney will contact the involved parties as soon as possible, so as to avoid any delay in the scheduled closing date. The second function of the attorney is to make sure that you understand the closing transactions completely. Any questions regarding the closing documents can be referred to the attorney, or his closing staff.

PRIOR TO CLOSING...

A new homeowner’s insurance policy must be in place the day of the closing. Therefore, it will be necessary for the attorney’s office to be in contact with your homeowner’s insurance carrier [hazard carrier) prior to closing. Please direct your insurance agent to contact the attorney’s office. Hazard Insurance premiums can differ greatly according to carriers, and we recommend calling several sources recommended by your realtor. Hazard insurance rates outside the city limits of Huntsville or Madison will probably be higher than within city limits, however, the difference ïs usually made up by lower property tax rates outside the city. One year’s insurance premium will be collected at closing and paid directly from the closing attorney’s escrow account. Your mortgage company may require a survey, and the attorney must examine this document prior to closing. Typically in this area, the party who is responsible for closing costs orders the survey.

WHAT CAN YOU EXPECT AT CLOSING?

Many mortgage lenders are able to prepare closing papers several days in advance of the closing. If the attorney’s office receives these documents a day or so prior to closing, it may be possible to review the settlement statement (HUD I) prior to the scheduled appointment. It is the policy of this office to provide the parties with a draft settlement statement as early as possible so that everyone understands the actual transaction before arriving at the closing table. The Settlement Statement (HUD I) is the actual accounting of the purchase costs of your home. It contains everything from the sales price, and down payment (earnest money), to closing costs, escrows, and property taxes. This is one of the most important documents at the closing table, and should be scrutinized thoroughly to ensure that the sales contract was interpreted appropriately. Changes can be made quickly and easily, should conditions change at the time of settlement. Typically, a residential closing takes less than one hour. Both the purchasers and the sellers and their real estate agents will be present. The attorney or your mortgage lender prior to the execution of the documents should answer any questions to your satisfaction. Many of the documents you sign will be standard for all residential loans; the attorney will explain any atypical documents.

 Buying a new home is an exciting and important milestone in your life. Choose experienced professionals to help you guide through your newest adventure!

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