- 6-8 months before anticipated closing date ("a.c.d.")
Contract signed by buyers and initial deposit paid to builder
- Appointment with chosen lender and draft mortgage application taken.
Borrower should open U.S bank account while in Florida in readiness to wire further deposit and closing monies during the transaction.
- Balance of 10% deposit wired to builder, very often within 30 days of signing the contract once the buyer has returned to the UK
- Once the buyer has paid the deposit, lender will issue a "mortgage (or loan) commitment" (agreement in principle) and serve a copy on the builder. Builder will then apply for planning permission (building permit) from the local council and start building the property.
- 8-10 weeks before the "a.c.d"
Lender will contact the borrower and take a final mortgage application. Application and statutory disclosures sent via fax or email for signature and return by the borrower. Lender will require payment of $600, representing the cost of the appraisal (valuation) and lender's processing fees. This amount will be shown as a credit on the Good Faith Estimate or "POC" - paid outstanding closing.
- 4-6 weeks before the "a.c.d"
Lender will lock the interest rate for the mortgage if favourable (US Dollar mortgages only).
- 2 weeks before the "a.c.d"
Borrower should arrange to wire the closing monies and mortgage reserves (if required) onto their U.S bank account ready for the lender to verify the monies are in the U.S and available to close. Borrower should also arrange for the hazard insurance binder to be issued in readiness for closing.
- 7-10 days before the "a.c.d"
Appraiser carries out the final inspection, to ensure the property has been fully completed, including water in the pool, the utilities connected etc. Without the final inspection the lender will not release the mortgage funds
- 7 days before the "a.c.d"
Lender sends the closing instruction to the title company for them to prepare the closing documents (e.g. mortgage deed, promissory note, settlement statement - HUD1)
- Closing arrangements Closing is more complex and inflexible for the closing of Florida property compared to the UK, where the solicitor has full control of the closing procedures. Closing can be via mailaway or by personal attendance. Whichever method is used, once a closing date is agreed it cannot be varied or changed without the numerous closing documents being subject to being re-drawn, usually with a re draw fee. The reason is all closing documents are pre dated as property taxes. Homeowners Association fees, mortgage interest etc. have to be calculated and prorated before the title company can prepare the settlement statement. However, a borrower can sign the closing package on or before the arranged closing date.
- Title Company prepares the financial settlement statement (also known as a HUD-1) and closing documents and sends the closing package via an international courier to the borrower for signature. Borrower upon receipt, signs several documents before a notary public or solicitor. All other documents require a signature only. Borrower should make arrangements with their U.S bank for the issue of a cashiers cheque or wire transfer for the amount required to close (as shown on line 303 of the settlement statement) and request their bank to send the closing monies to the title company in time for when they return the executed closing documents to the title company.
- Borrower returns all the executed closing documents to the title company who will attend to post closing formalities such as disbursing various monies to the builder, realtor, lender etc. The title company will file the appropriate documents and necessary stamp duties with the County Court in order to register the transaction in the name of the buyer (equivalent to the solicitor registering the transaction at the Land registry in the UK on behalf of the lender & purchaser)
- Several weeks after the closing date the title company will by post to the borrower, the original Warranty Deed, title insurance policy and a package containing copies of all the executed closing documents for safe keeping.
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| Notes: |
a) The above steps and time scale may vary from lender to lender and from builder to builder and are not meant to be definitive.
b) These steps are for guidance only and Internationalmortgages.net cannot accept any liability for negligence or loss arising out of any person following these steps. Furthermore, they are not to be regarded as conditions of a contractual nature but merely to assist overseas buyers/borrowers of what is involved in the U.S mortgage process of the purchase of a property under construction.
c) Mortgage programmes, guidelines and mortgage interest rates can change without notice.
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