As you reach your new home’s closing day, the excitement of owning your first home is building toward the finish line! But before you get your new keys, you will have to carefully review and sign all the legal documentation required to issue your mortgage and to transfer the ownership of the property over to you. Below are three title terms you should know as you approach the closing table!
Title
A title is a legal right to ownership of a property. When you buy a home, the title will be transferred to you from the seller, along with all the rights that come with it, including the right of possession, exclusion, control, enjoyment and disposition. Titles can also be transferred through a will, court decree or by law.
Escrow
When your money is in escrow, that means that it is being held by an independent third party during a transaction. The funds are held while the transaction is being finalized and then disbursed to the correct parties. Escrow serves to protect the buyers and sellers and ensures that these payments are paid in full and on time.
Settlement
The settlement, also known as your closing, is the final step in your homebuying journey. Once all the paperwork is signed and the funds have been distributed, the title will be passed on to you and you will receive the keys to your new home.
