P.O. BOX 216
   SELINSGROVE, PA 17870
   570-374-3747 TELEPHONE
   570-374-6742 FAX

Explaining the Settlement Process

The process of refinancing your home, or purchasing Real Estate, is involved and complex.  There are many different people involved, and many important details to attend to.  Below appears a general overview of the process from a Loan Application to Settlement.

Loan Application - Once you have decided to refinance, or after you have signed a Sales Agreement for the purchase of Real Estate, you will need to submit a Loan Application with a bank or mortgage company.  There are many qualified loan officers and mortgage brokers in our area who will assist you with this process.  Generally speaking, you should be prepared to provide documentation verifying your income, debts, and other important financial information.  It is often helpful or required for you to provide one or two past years tax returns.

Loan Processing - At the time of submitting the Loan Application, the Loan Officer can frequently give you a good idea of whether you will qualify for a loan.  But any such assurance will only be confirmed one the Lender has completed the Loan Processing.  Through this process the Lender will further verify income and debt information, review your credit report, and analyze the fundamentals of the transaction itself.  This is sometimes referred to as an 'Underwriting' review of the Loan Application.  While time periods vary, typically this process takes between 2 to 6 weeks to complete. If you have obtained 'pre-qualification' with a Lender, this time period can sometimes be shortened even more.

Loan Commitment Letter - Once your Loan Application has been approved, the bank or mortgage company will issue a 'Loan Commitment Letter.'  This is an important document that includes all of the details that need to be attended to in order to receive the final loan at Settlement.  This is the document that is generally used as the outline for Settlement.  When speaking with your Lender, it is important to ask them to provide a copy of the Loan Commitment Letter to us as soon as possible, as this is the notification of authority to move forward with the Title Search process noted below.  You should call us to verify that we have received the Letter.

Appraisal - All Lenders require that an appraisal be performed on the property prior to closing.  This is done to ensure that the bank or mortgage company will be receiving adequate collateral in relation to the amount of the loan.  Your Lender will likely handle the selection of the appraisor and the coordination of the completion of the appraisal.  Make sure to ask for a copy of the appraisal at settlement if you have not received one before that time.  It is an important document that provides an owner with valuable information regarding the value of their property.

Title Search - Lenders require that a Title Search be conducted on the real estate involved in the transaction.  This is done to ensure the bank or mortgage company that there are no improper liens or legal issues associated with the property, which could cause a problem with the mortgage being issued.  Once the Title Search is completed, Title Insurance is issued.  The purpose of the Title Insurance is to provide the Owner and the Lender with the certification and insurance that the Owner has clear title to the property, and that the Lender has the necessary right to the collateral in the real estate.  Title Insurance is required by most Lenders. We at ESS conduct these Title Searches and provide the Lender with the necessary Title Insurance.

Inspections - In any sales agreement, the buyer of real estate commonly has the option to conduct a variety of inspections on the property, including such items as a pest inspection, radon testing, home or property inspection, water testing, etc. For the most part these options are typically selected at the time the sales agreement is finalized. Tests such as a pest inspection are routinely required by most lending institutions.  We at ESS maintain a listing of professionals who can be contacted to perform such testing in our area.  Please do not hesitate to give us a call and we will be glad to provide you with a copy.

Scheduling Settlement - Once all of the above items have been completed, as well as any other special conditions, settlement can be scheduled.  This scheduling is done by ESS, in conjunction with the Owner, Lender and Realtors.  You should advise your Lender and ESS of any special circumstances associated with the timing of the settlement as early in the process as possible. Upon receipt of a referral, we at ESS immediately inquire of the Lender of a prospective date for settlement, and at least place a tentative date for settlement in place.  This can only be a tentative date at first, as the final date for settlement depends upon when the items described above are finalized.

Information for Settlement - You should make sure to bring certain items with you to settlement.  These items include your driver's license (check with settlement agent if other identification is to be provided), copies of current year real estate tax bills showing whether paid or not, copies of documents you received from realtors during the process, copies of bills to be paid at closing, and any other items noted by the Lender or Settlement Agent.

Location of Settlement - Settlement typically takes place in our offices, or at the office of a bank.  Please let us know of any special considerations for the place of settlement as early in the process as possible.

Settlement - At the Settlement be sure to ask any questions you might have related to the transaction.  Your Settlement Agent will handle the transaction during this process.

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