By custom, it is your choice  as a refinancing owner or a purchaser of the property to select the closing agent.  Closings are conducted by independent closing agents and attorneys; both of which will be referred to as "closing agents" in this guide.

Who decides which closing agent or attorney handles my closing?

By custom, it is your choice  as a refinancing owner or a purchaser of the property to select the closing agent.  TOP

What are the functions performed and services provided by the closing agent?

It is customary for the closing agent to receive a "title order" from a real estate agent, a loan officer, a purchaser, or a refinancing owner in preparation of a closing.  The closing agent will then order a title search, a location survey (if required), payoff statements, and real estate tax information in preparation of closing.  Within a few weeks prior to closing, the closing agent will schedule a closing date with the lender and the parties involved, as well as, clear title and issue title insurance commitments to the respective parties.  The day before closing or on the day of closing, the lender will provide final loan instructions to the closing agent along with the lender documentation. Upon receipt of these items, the closing agent will prepare the final HUD-I Settlement Statement and conduct closing with the parties.  Generally, the actual closing involves an explanation of the documentation by the closing agent and the acquiring of signatures which takes approximately one hour.  In some cases, there may be subsequent adjustments to the HUD-I Settlement Statement or other documentation that will require a longer closing time.  At the time of closing or shortly thereafter, the lender will remit funds to the closing agent's escrow account for disbursement.  TOP

What fees and costs should I expect to pay the closing agent?

Variable Fees and Costs - Both the types and amounts of these fees and costs will vary widely among closing agents and attorneys and include such items as:

• A settlement/closing fee
• A title search/abstract fee
• A title insurance premium
• A title insurance binder fee
• A location survey fee
• A courier/overnight fee
• A notary fee
• A document preparation fee, etc.

Non-Variable Costs - These costs include the transfer and recordation taxes charged by the State of Virginia and the respective county along with the costs charged by the county clerk's office for recording of the Deed, Deed of Trust (Mortgage), and other documents which require recordation.  Unless otherwise negotiated in the sales contract, the standard purchase transaction will require that the purchaser(s) pay the Deed Tax ($2.00 per $1,000.00 of purchase price) and the Trust Tax ($2.00 per $1,000.00 of loan amount) .  In a residential refinance transaction that does not include a transfer of ownership, only the Trust Tax will be charged based on the new loan amount.  If the new lender is the same lender that is being paid off at closing, the borrower will only be required to pay the Trust Tax on the difference between the new loan amount and the amount of the existing loan being paid off at closing.  TOP

Why do I need Title Insurance?

Title insurance is a one-time charge assessed at settlement that protects a homebuyer in the event that the property title, which proves ownership, is flawed. Problems with the title can include outstanding mortgages or liens; easements; inaccurate notary acknowledgments; and deeds, wills, or trusts that contain wrong names or improper vesting. Title companies offer two kinds of policies - the 1992 ALTA (American Land Title Association) or the newer ALTA policy. The difference between the two is based on pre-purchase problems, such as a deck addition that was erected without a proper building permit, and post-purchase problems. While the older policy would not cover such a problem, the new ALTA policy does. While it is more comprehensive than the old one, it also costs about 20 percent more.

It has become common for title companies to automatically assume homeowners want the more comprehensive and more expensive coverage, but buyers do have a choice. In fact, title insurance is not required by law. However, most lenders will not provide a mortgage without it. The cost, generally a few hundred dollars, varies based on the value of the property. TOP

What is the difference between a Lender's Policy and an Owner's Policy?

A lender's policy protects the mortgage holder (the institution that owns your mortgage). If there is a fault in title that results in a loss, the mortgage holder will be paid back.

An Owner's policy protects you, the homebuyer, against a loss that may occur from a fault in your ownership or interest you have in the property. A title policy will protect the equity in your new home.

Compare coverage and pricing for different title policies; a "Standard" Title Policy and the "Eagle" Title Policy.  TOP

What are some examples that a Title Policy would guard against?

• False impersonation of the true owner of the property by the seller or other persons previously in title
• Forged deeds, releases and other documents
• Deeds by persons of unsound mind
• Deeds by minors
• Invalid documents completed by an expired attorney
• Invalid deeds delivered after the death of the grantor
• Deeds by supposedly single persons but actually married
• Fraud
• Claims for unpaid estate inheritance and gift taxes against prior owners of your home
• Unrecorded easements - giving one party the right to enter another party's property
• Undisclosed descendents of former owners of your home or the land on which it is situated

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What factors should I consider in choosing a closing agent?

While the functions performed and services provided by the closing agent include those matters previously described, the most important role played by the closing agent is the issuance of the title insurance policy.  Without the closing agent's ability to issue a title insurance policy, your transaction could not proceed to closing.  Ultimately, the most vital function of the closing agent is issuing a title insurance policy, and since title insurance policies are all substantively equal, the closing agent is simply providing a commodity necessary to complete the transaction. Unlike our competitors, you will receive your Owner's Title Insurance Policy at closing for no additional charge. TOP

What documents should I expect to sign at my closing?

You will be required to sign numerous documents at the time of closing.  In the majority of closings, the lender prepares and delivers the documents to the closing agent the day before or day of closing.  Thus, most borrowers do not have the opportunity to review the documents prior to closing.  Moreover, most borrowers do not take the time to read the documents at closing because of time constraints. While the majority of the documents are simply disclosures and other non-binding notices to borrowers, a handful of the documents are vitally important and legally binding.  The documents described in Items I-III are legally binding and ones that you should take the time to read at closing. Documents under Item IV are disclosure and non-binding documents. To view documents you must have Adobe Acrobat.

1. HUD-1 SETTLEMENT STATEMENT - This is the document which provides an itemized listing of the funds that are payable at closing.  Settlement charges (closing costs) are categorized on the HUD-1 into seven series sections as follows:

• 700 Series Line Items (Total Sales/Broker's Commission) detail the realtor's commissions paid by the parties to the transaction.  This section is only used in purchase (not refinance) transactions, and in most jurisdictions it is the seller(s) who pay the real estate commissions.
  
• 800 Series Line Items (Items Payable In Connection With Loan) detail the charges of the mortgage lender and/or mortgage broker including such items as loan origination and loan discount points, appraisal and credit report charges, lender document preparation fees, lender underwriting fees, lender tax service fees, lender flood certification fees, lender application fees, lender commitment fees, lender overnight delivery fees, etc.
  
• 900 Series Line Items (Items Required By Lender To Be Paid In Advance) detail any required prepaid interest charged by the lender as well as any homeowner's/hazard insurance premiums, mortgage insurance premiums, flood insurance premiums, etc.
  
• 1000 Series Line Items (Reserves Deposited With Lender) detail the number of months and monthly amounts required by the lender for establishing an escrow account to pay for real estate taxes, homeowner's/hazard insurance, mortgage insurance, flood insurance, or any other assessments required to be held in escrow by the lender.
  
• 1100 Series Line Items (Title Charges) detail the fees and costs charged by the closing agent for coordinating closing with the parties, conducting the closing, and issuing title insurance.  These items include such things as settlement or closing fee, abstract or title search, title examination fee, document preparation fee, notary fee, attorney fee, title insurance premiums, etc.  This section generally represents the bulk of the actual closing costs charged to the borrower.
  
• 1200 Series Line Items (Government Recording and Transfer Charges) detail the recording fees, state/county/city transfer and recordation taxes, and any other governmental tax assessed for the transfer or recording of instruments.
  
• 1300 Series Line Items (Additional Settlement Charges) detail other miscellaneous charges not falling into any of the above categories.  These items may include such things as survey costs, pest inspection fees, messenger/courier fees, etc.

2. NOTE (DEED OF TRUST NOTE/ PROMISSORY NOTE)- The Note, sometimes referred to as either the Deed of Trust Note or Promissory Note, is the borrower's promise to repay the loan.  The note identifies the amount of the loan, the rate of interest, the term of the loan (i.e., 30 year, 15 year, etc.), the payment due dates, the grace period and late charges, prepayment penalty provisions, and other general default provisions.
   
3. DEED OF TRUST (MORTGAGE) - The Deed of Trust is a lengthy document (approximately 7 to 12 pages) requiring the signature of all owners of the property for the purpose of granting a security interest.  After closing, the Deed of Trust is recorded with a legal description as a lien among the land records and as a matter of public record for the purpose of securing the borrower's promise to repay on the Deed of Trust Note/Promissory Note.  In addition to identifying the property owners, the loan amount and the term of the loan, the Deed of Trust generally describes matters that would constitute a default on the loan thereby giving the lender cause to commence a foreclosure proceeding against the property.

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What do I need to do to prepare for Closing?

Upon receipt of the ratified contract, our office will begin the process of conducting a title search and coordinating settlement with your lender.

If you have not already scheduled a date and time for your settlement convenient to all attendees, please call (540-341-1000) or e-mail us to do so, or you may have your real estate agent coordinate closing with us.

***YOU WILL NEED TO BRING CERTIFIED FUNDS*/CASHIER'S CHECK WITH YOU TO CLOSING***

*You may also wire funds into our Escrow Account - please call us for instructions at 540-341-1000