What happens after closing?
After you purchase your home, because a Grant Deed is recorded, and purchasing a home is public record, your name(s) go on a list that will be marketed continuously. As a result, you will be bombarded with several types of soliciting: copies of public documents, security systems, window coverings… the list goes on and on. Along with some other important items, here are some things that I would like to bring to your attention (click on each item above for detailed information).
Your 1st Payment
1st Payment - When we close escrow, generally, there will be a gap of a minimum of 30 days before your 1st payment is due. When you sign your final loan documents (the big stack of papers that escrow gives at the end!), there will always be a “1st Payment Letter” in those originals. It will have all of the pertinent information, Payment amount, Lender Name, Mailing Address, Loan #, etc. It can take up to 60 days sometimes for the servicing department to get everything set up. If you don’t receive anything from the lender, you can always refer to your loan documents and find the “1st Payment Letter”.
Mailers – As mentioned above, your Grant Deed will trigger many types of solicitations. You will get several that are for Home Improvement. These are for you to decide if you are interested. But as with anything else, it is always recommended to use a contractor that is referred by someone you know that has performed for them. Make sure you can see their work. And always be wary of anyone that requires any type of payment in advance. My understanding is that they can only collect up to 10%.
Copies of Public Documents
Copies of Public Documents – You will get several mailers about getting a copy of your Grant Deed. Or about filing a Homestead Declaration. Or countless other things. These are all just scams to make you pay for something that is free. If you have questions, please feel free to contact us about any of these mailers. ABC News Article on Misleading Documents.
Supplemental Taxes – This is an important one! When you purchase a home, you will acquire the property and will be taxed based on the purchase price. However, it takes the County several months to “re-assess” the property, even though they will eventually use the purchase price as the assessed value. As a result of this delay, you will continue paying the tax rate that the current seller pays until re-assessment happens. This causes a few problems. If the current taxes are lower than what you should be paying, there will be a gap of what is paid and what is due (supplemental taxes). This will cause the lender, who collects for your taxes and insurance, to have a problem when the tax bill is due. They will pay what the County requires currently. So, if the bill is less, they will pay less and then, after the lender does an “escrow analysis”, they will see that there is too much in the account and send you a refund!
Once you are re-assessed, it will go back up to the right amount. Now your escrow account will have a shortage and they will want the money back, or raise your payments! This is primarily due to a CA law that says the lenders cannot keep more than what is due in the account. So, if you ever get a refund, SAVE IT! Put it in the bank and leave it. Now, as far as the Supplemental Taxes go, YOU ARE RESPONSIBLE FOR THESE. While the lender may be able to pay them, and sometimes they do, this will cause your escrow account to have a shortage. Pay these yourself and make sure these get paid on time. For more information, click here: San Bernardino Tax Collector Supplemental Taxes.
Sale of Loan
Sale of loan – More than likely, your loan will get sold to another servicer at some point. That only means that who you make your payment to has changed. You will be notified, in advance, by both your current lender, as well as the new lender. It is required by law that both notify you. There will not be any changes in the terms of your loan. However, there could be changes due to the escrow analysis (as mentioned above) that the new lender performs at acquisition. Unfortunately, this is part of the process. If ever there is a problem, communication is key. If you run into a problem that you don’t understand, contact us so we can help figure out the problem and explain it in terms you can understand. For more detailed information: Details on Transfer of Servicing
Refinance Solicitations – Again, because this is all public information, lenders will send you all sorts of solicitations to get you to call them about refinancing. BE CAREFUL! While there are many legitimate lenders out there, there are also those who are not. These mailers are designed to make you think that they represent your current lender. They do not. Be wary of these lenders. If they are starting out misrepresenting who they are, do you really want to trust them with the largest financial transaction you will probably ever do? If you are considering refinancing, contact me. I will tell you if it makes sense. But more importantly, I will be honest and tell you when it DOESN’T make sense and why. If there is an opportunity to save you some money, I will be in touch with you, either by email, phone or mail. It would be my honor to be able to work with you again in the future!
Below are some examples of what these solicitations may look like:
Tax Time – When it comes to tax time, you will be asked for your Final Closing Statement. You should have this in your final loan docs that were signed when we closed escrow. If for any reason you cannot find it feel free to call us and we will get a copy out to you.