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Frequently Asked Questions
Explaining the Process
Q: What happens BEFORE the settlement?
A: The title company should coordinate all the parties, including the seller, buyer, real estate agents, lenders, etc., and gathers all the information for settlement. Some of the major steps that must be completed prior to settlement include:
- Establishing a time for settlement that is mutually agreed upon by all parties
- Gathering information from all the parties including a copy of the contract, information sheets from the agents, sellers, and buyers, and lender information
- Ordering the sellers' payoffs
- Ensuring that the termite inspection has been completed
- Collecting the HOA or condo dues information
- Obtaining the Certificate of Insurance
- Scheduling the settlement with the lenders
Reviewing the contract, the title work and the surveys, where applicable, to ensure that the property in question is clear of title defects and survey problems, and the contract accurately reflects the transaction.
Additionally, either the day of or the day before closing the Purchasers and their agent must complete a final Walk-Through of the property to ensure that all repairs from the home inspection have been completed and that no new problems with the property have arisen.
Q: What happens DURING the settlement process?
A: Clients always ask: what should I expect at settlement? First, it is important to know what to bring to settlement. Here is a detailed list of our requirements:
- Both parties: bring a valid picture identification, such as a driver's license
- Buyer: you will need to bring a certified or cashier's check for the total amount of your closing costs or have arranged to wire the money to us - call office location for instructions
- Seller: if you want us to wire your proceeds to you, please provide wiring instructions or a voided check
- Secondly, we are asked - how long do settlements last? A closing for a purchase usually lasts about one to one and half hours, whereas a refinance only lasts about half an hour.
- Thirdly, clients ask - who will be at settlement? At a purchase, both parties (buyers and sellers) attend along with their agents. At a refinance, normally only the borrower(s) attends. During both a purchase and a refinance, the parties sign all of documents, and the purchaser(s) sign the lender's documents. As each document is presented to the parties for signing, the settlement agent explains the purpose of each document. Finally, the parties want to know - who conducts the settlement? Mostl closings are conducted by one of our attorneys or a licensed settlement agent.
Most clients are also very interested in how much everything costs and what documents are being signed at closing. One of the primary documents reviewed at settlement is the HUD-1 Settlement Sheet. This document outlines all of the charges to each party, including Lender's Fees, Escrows, Government Recording Charges, the Survey, the Termite Inspection, HOA/Condo dues, and the Title Company's Fees. After reviewing the HUD-1 and signing our documents, the Seller will sign the deed, which transfers ownership of the property to the Purchaser. Once the deed has been signed, then the purchaser can commence with signing the Lender documents, which include the Note (which outlines the conditions of your loan) and the Deed(s) of Trust (a Security Instrument making the home the collateral for the loan's repayment).
Q: What happens AFTER the settlement process?
A:We also hear questions about what buyers and sellers need to be prepared for after settlement. Several important events occur after the day of settlement to conclude the closing process:
- The first step is the recording of your Deed and Deed of Trust at the local county courthouse. This step alerts the public (via the land records office) to the fact that the ownership of the property has changed into the names of the Purchasers
- Once recording occurs, the next step is the distribution of all funds, whereby the Seller receives his/her proceeds and the deeds of trust are paid in full and closed
- After learning that the documents have been recorded, The Settlement Group also sends the lenders a packet of all the documents they require from settlement
- Additionally, the Purchaser will need to remember that if s/he purchased an Owners' Policy as part of the title insurance, then the Policy will be mailed to the Purchaser after closing. This process usually takes between six to ten months as the Policy is not drafted until the county returns the recorded documents to the settlement company
Q: Who chooses the settlement company?
A: During a sale, the buyer chooses the title or settlement company. During a refinance, the borrower chooses the title company.
Q: Who does the settlement company represent?
A: The settlement company represents the transaction, ensuring that the terms of the contract are met. Moreover, the closing agent and the settlement company do not act as an advocate for any of the parties -- borrowers, sellers, lenders or agents.
Q: Who do I contact if I have any questions prior to closing?
A: Please feel free to call the manager of the office where your closing is taking place. You can visit our locations page here as well.
Q: Why do I need title insurance if the title has been examined for defects?
A: Even the most thorough title search will not uncover certain possible defects. A few examples are: mistakes in the public records, forged deeds and other documents or undisclosed heirs. You don't want an event to occur that may deprive you of your right to use the property or sell it. "Reasons why you should buy title insurance
Q: Why do I need a lender's and an owner's title policy?
A: Since Lenders an Owners have an interest in the clear title to the property, most Lenders will require a buyer to purchase a Lender's Title Insurance Policy. This policy protects the lender, only, against possible title defects up to the maximum amount of the loan. The Owner has no coverage under this policy. In order for the Owner to be protected they must purchase an Owner's Title Insurance Policy. Owner's title insurance will protect you against any covered loss up to the full policy amount. There are two types of Owner's Policies available to the buyer.
Virginia Land Title Association extends a tremendous amount of appreciation to VLTA Member, Myrna Keplinger, Principal of the The Settlement Group for sharing all of the materials found under the Consumer section of this website. All materials are copyrighted under The Settlement Group and VLTA has received "reprint" permission for its use.