FIRE INSURANCE POLICY - Your lender will require a hazard insurance policy naming the as the 1st Loss Payer. It is to your advantage to shop around for the best rate. Once you have placed your insurance, instruct your agent to call the escrow officer as there will be other information needed to complete the policy.

LENDERS REQUIREMENTS AS TO FEES PREPAID INTEREST - Interest on your new loan is paid in arrears (i.e. Escrow closes 7/10 escrow will collect interest from 7/9 to 8/1; 1st payment is 9/1 - which pays interest from 8/1 to 9/1).

90% FINANCING - additional fees may be required: PMI (Private Mortgage Insurance) Usually .05% point fee. The lender will require 1 year prepaid in escrow plus 2 months placed in a reserve account. FIRE INSURANCE One year pre-paid in escrow plus 2 months placed in a reserve account.

REAL ESTATE PROPERTY TAXES - Depending on the month of closing the lender will ask for 2 to 5 months tax reserve. (Escrow closes 7/10; 1st payment 9/1; 5 months tax reserve will be collected in escrow, based on the new estimated assessed value. 5 months tax reserve and the 9/1 payment will be sufficient to pay the 1st installment of taxes in October, with one month additional remaining in the reserve account).

CREDIT CARDS/PERSONAL LOANS/CAR LOANS - Depending on your income to loan ratio, the lender may require that all or a portion of your debts be paid in escrow. They will supply escrow with estimated balances. It is your responsibility to submit current billings and the self-addressed envelopes to escrow for payment. Escrow does not check balances or recent payments made.

FUNDS TO CLOSE ESCROW - Assembly Bill 512 (Good Funds Bill), effective January 1, 1990 states that a title company may only make funds available for monetary disbursal in accordance with certain rules. Therefore, a cashiers check must be deposited to escrow 1 business day prior to recordation; wired funds should be sent 2 business days prior to close of escrow. Any other type of check deposited for closing can delay close of escrow for check clearance up to 10 days.

CLOSE OF ESCROW - Signing the loan documents and escrow instructions is not the closing day. After the documents are signed by buyers and sellers, the escrow officer must package and return to the lender for their review. Lenders take 24 to 72 hours to review and fund. The day after the lender deposits funds to escrow, escrow presents the original documents (deed, deed of trust) to the County Recorder for recordation. The recordation day is the "Close of Escrow."

POWER OF ATTORNEY - If any one of the buyers will not be available to sign the escrow instructions and loan documents, notify your real estate agent immediately. Your real estate agent will notify your loan broker or bank and the title company. Most banks will accept a power of attorney's signature if the document is prepared by the title company. Power of Attorney must always be approved by the lender.

VESTING OF TITLE - Prior to your appointment with your escrow officer you should be aware of and know how you wish to take title. Holding title is an individual concern. If you are unsure of how you wish to take title, consult with your attorney or tax accountant. Neither your real estate agent nor the escrow officer can advise you on this matter.

TITLE INSURANCE POLICY - You will be required to purchase an Owner's Title Policy of Insurance (CLTA/Owners) and a Lenders Title Policy of Insurance (ALTA/Lenders). A title company will not handle an escrow, nor will a lender loan you money without title insurance.

CLTA OWNERS POLICY - Insures that you have clear title to your property and that no other individual or government entity has any recorded rights, hense, claims or encumbrances to your property.

ALTA LENDERS POLICY - Issued to institutional lenders only. This policy insures the lenders priority and the fact that title is marketable. It covers both recorded and unrecorded matters such as: Encroachments, unrecorded easements, access, loss of priority.

SUPPLEMENTAL TAXES Usually within 4 months after recordation of the Grant Deed, the County Tax Collector will send you a supplemental tax bill. This tax bill is a pro-rated bill based on the difference of the existing assessment and the new assessment. Your new assessed tax valuation can be from 1.025% to 1.25% of the sales prices, depending on the area in which you purchase your property.

CLOSING COSTS IN ADDITION TO THE LENDERS FEES Title Fees & Escrow Fee Recording Fees Document Preparation Fees Home Warranty Inspection Fees: termite, roof, property, etc. Fire Insurance Premium for 1 year Tax Pro-rations Estimated Courier & Fed-Ex Fees Notary Fees City Transfer Tax If Purchasing a Condo: HOA Transfer Fees 1 Month HOA Dues and Pro-ration for balance of month