A Place of Your Own
Your home is your castle, as the old saying goes. A home is a place to call your own. Perhaps you are ready to settle down and want the feeling of permanence and involvement that comes with owning your own home. Perhaps you need more living space. Or maybe you want more freedom than you have in a rental unit to adapt your living space to your needs.
Financial Incentives
For many people, the motivation for home ownership is primarily financial. Owning your own home is a first-rate investment for a number of reasons.
Scheduled Savings- when you buy a house, mortgage payments serve as a type of scheduled savings plan. Over time, you accumulate ‘equity’, an ownership interest in property that you can often borrow against or convert into cash by selling the house.
Stable Housing Costs- Rents typically increase year after year, the principal and interest portion of most mortgage payments remain unchanged throughout the entire repayment period.
Increased Value- Houses typically increase in value, or ‘appreciate’ over time. The increased value is as good as money in the bank to the homeowner.
Tax Benefits- Interest paid on a home mortgage is usually deductible—this is a tax advantage not available to renters.
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What is an escrow?
Buyers and sellers of a piece of property establish terms and conditions for the transfer of ownership of the property. These terms and conditions are given to a third party known as the escrow holder. In turn, the escrow holder has the responsibility of seeing the terms of the escrow are carried out. The escrow is an independent neutral account and the vehicle by which the mutual instructions of all parties to the transaction are complied with.
How does the escrow process work?
The escrow is a depository for al monies, instructions and documents necessary for the purchase of your home, including your funds for down payment and your lender’s funds and documents for the new loan. Generally, the buyer deposits a down payment with the escrow holder and the seller deposits the deed and any other necessary documents with the escrow holder. Prior to the close of escrow deposits the balance of funds required and agreed upon by the parties with the escrow holder. The buyer instructs the escrow holder to deliver the monies to the seller when the escrow holder:
Forwards the deed to the title company for recording.
Is notified by the title company that a policy of title insurance can be issued that shows title to the property is vested in the name of the buyer.
The escrow holder thus acts for both parties and protects the interests of each within the authority of the escrow instructions. Escrow cannot be completed until the terms and conditions of the instructions have been satisfied and all parties have signed escrow documents. The escrow holder takes instructions based on the terms of the purchase agreement and the lender’s requirements.
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