The following information will help you become more comfortable with the Escrow Process you are about to begin. We hope to answer your questions in advance and provide you with step-by-step information that will clarify your part in this process.

Please feel free to call us if you have any questions. We look forward to serving you.

What exactly is an escrow?
An escrow is an independent "stakeholder" account and is the vehicle by which the interest of all parties to the transaction are protected.

Your escrow is created shortly after you execute your contract to purchase your home. The escrow becomes the depository for all monies, instructions and documents pertaining to the purchase of your home. Some aspects of the purchase are not part of the escrow. For example, the buyer and the seller must decide which fixtures or personal property items are included in the purchase. Similarly, loan negotiations are between the buyer and the lender. Your real estate agent can guide you in these non-escrow matters.

Escrow services are generally provided by title companies

How does the escrow process work?
The escrow is a depository for all monies, instructions and documents necessary for the purchase of your home, including your funds for the down payment and your lender's funds and documents for the new loan. The escrow officer takes instructions based on the terms of your purchase agreement and your lender's requirements. The escrow officer can hold inspection reports and bills for work performed as required by your purchase agreement.

How do I open an escrow?
Your real estate agent will open the escrow for you. As soon as you execute your purchase agreement, your agent will place your initial deposit into an escrow account at First American Title or into the real estate broker's trust account.

What do I do next?
I've selected my home, executed my purchase agreement, made my purchase deposit and an escrow has been opened.

Unless you are paying all cash, the next step will be to apply for a mortgage loan. Your real estate agent will be able to assist you in selecting a lender.

How does the loan process work?
Your real estate agent can provide you with current financing information to help you in selecting a lender. The lender might be a bank, savings and loan or a mortgage company.

You will be required to complete a loan application which will require personal and financial information.

When the loan is approved, what's next?
When your loan is approved and the loan documents are sent to the escrow officer or the escrow assistant handling your transaction, "escrow instructions" will be prepared.

What are escrow instructions?
Escrow instructions define all the conditions that must occur before the transaction can be finalized. Your escrow instructions represent your written statement to the escrow holder (the title company) protecting your interests. Your escrow instructions specify, in a debit and credit format, the disposition of your purchase funds. They also provide for title protection for your home.

You may sign your escrow instructions and loan documents at a First American office, your real estate agent's office or some other location agreed upon by all parties.

What do I need to do before my appointment to sign the escrow papers?
Cashier's Check. Obtain a cashier's check or certified check made payable to First American Title in the amount indicated to you by your escrow officer or escrow assistant.

Lender's Requirements. Make sure you are aware of your lender's requirements and that you have satisfied those requirements before you come to the title company to sign your papers.

Hazard/Fire Insurance. If you are purchasing a single family, detached home (or in some cases, a town-home), be sure to order your hazard/fire insurance once your loan has been approved. You must have your insurance in place before the lender will send money to the title company.

Title to Home. Decide how you wish to hold title to your new home prior to your escrow appointment.We suggest you consult a lawyer, tax consultant or other qualified professional before you decide.

What's the next step after I've completed my sign-off?
After you have signed all the necessary instructions and documents, the escrow officer will return them to the lender for a final review. This review usually occurs within a few days and upon completion, the lender is ready to fund your loan and advises the escrow officer.

It signifies legal transfer of title from the seller to the buyer. The original deed to your home will be mailed directly to you at your new home by the County Recorder's office. This usually takes several weeks.

1. Are you aware of your lender's requirements?
2. Have you ordered you hazard/fire insurance?
3. Bring a cashier's check.
4. Arrange for transfer of funds if necessary.
5. Arrange for Power of Attorney if necessary.
6. Bring either your valid driver's license or passport.
7. Decide how you wish to hold title.

The following is a brief list of the best sources for assistance for certain common questions:

Details of your purchase agreement:
Your Real Estate Agent

Final amounts needed to close escrow (after receipt of loan papers):
Your Title Company, Escrow Officer or Escrow Assistant

Possession and key to home:
Your Real Estate Agent

Hazard/Fire insurance:
Your Insurance Agent

Loan requirements and financial matters:
Your Lender or Mortgage Company or Real Estate Agent

Escrow Instructions (review at title company on sign off day):
Your Title Company, Escrow Officer or Escrow Assistant

How to take title or ownership:
Your Lawyer or Tax Consultant

Questions regarding property tax impounds:
Lender or Real Your Estate Agent

CREDIT SCORE
Do you know the score? The days when a prospective borrower could explain away credit blemishes with a simple letter are long gone. In late 1996 a statistical modeling technique called "credit scoring" was introduced and adopted by the mortgage industry. Credit scores range roughly from 375 to 900, with 900 being the best score obtainable. A borrower's credit score has now become the major determiner of what type of loan the borrower will be eligible for and how much down payment will be required.

Traditional FNMA and Freddie Mac financing requires a minimum of a 620 FICO score to obtain the best current rate available. The Federal Housing Administration, however, considers FICO scores but the agency has not yet set a minimum credit score requirement. Therefore, the FHA credit score requirement is far less stringent than traditional conventional financing. The FHA maximum loan limit is $139,600 and the conforming conventional maximum loan limit is $252,700.