After the abstract is completed, Sunnyvale Title Company will issue a “title opinion letter”, or if a title insurance policy is to be issued on the property, it will prepare a “Commitment of Title Insurance” to the lender and/or the prospective buyer. Sunnyvale Title Company opinion letter and the Sunnyvale Title Company title insurance commitment will each set forth all things that need to be completed and any problems that need to be corrected before the purchaser can receive “good title”. The title insurance company will complete all the necessary documents and will undertake to correct any problems. Once these things are done the parties are ready to exchange paperwork and “close” the deal.
The purpose of the closing is to sign and exchange all the documents necessary to convey title, secure the lender, and deal with collateral issues such as leases, rights-of-way, etc., and to explain in an orderly manner the costs to each party. This is done by preparing a closing statement or what is referred to in the industry as a “HUD 1”. The closing statement will include the mortgage lender’s charges, charges for preparing documents, the title company’s fees, recording costs, and the amount of the payoffs to release any existing mortgages, pro-ration of city and county taxes, real estate commission fees, survey fees, and any other costs associated with the deal.
At closing, Sunnyvale Title Company will collect the purchase money funds from the buyer and lender as well as the settlement costs from each party. With these funds, the title company then pays all of the expenses of the transaction, pays off any existing mortgages, and pays the seller the net proceeds of sale. All of this is done in accordance with the HUD 1 settlement statement.
After the closing, Sunnyvale Title Company will record the legal documents (deed, mortgage, assignments, etc.) at the county courthouse and then return the original documents to the correct party. New owners receive their deed which should be stored in a bank lock box or other secure location. The lender receives the original mortgage documents which they hold until the loan is paid in full. Once the loan is paid, the lender will “release” their lien against the property at the courthouse and will forward the original mortgage documents to the home owner. This is when the homeowner can enjoy the “burning the mortgage” ceremony.