Ready to Buy? Here are some key terms to know before buying property
BY THE PERK LENDING TEAM | May 3, 2023 | 2-minute read
Purchasing a home is one of the biggest purchases you will make in your lifetime. Here are a few common topics we get asked about by Florida homebuyers.
What is the role of an escrow company?
An escrow company is a neutral third party who manages the transfer of funds and documents. They oversee the entire process and are responsible for ensuring that all conditions of the sale have been met before disbursement of any funds at closing. You will wire your earnest money deposit, down payment, and funds for closing to an escrow company.
The bottom line: An escrow company protects everyone’s interest in a real estate transaction.
What is real estate title?
Title is a legal document that establishes ownership interest and serves as physical evidence of your ownership rights to the property. During the real estate transaction, a title company will pull a chain of title for the property to see how ownership has changed hands and to confirm that the title is free of liens.
The bottom line: Title establishes legal ownership of property.
Do I need title insurance?
A title insurance policy covers any claims to the property rights such as liens, easements, and encumbrances. If you are financing the purchase with a mortgage, lender’s title insurance will be required. The premium is a one-time charge that protects the lender. Owner’s title insurance, on the other hand, protects you. An owner’s title policy is not required but highly recommended. It’s not uncommon to see the seller paying for owner’s title in the sales contract.
The bottom line: Title insurance protects you and your lender against any claims to the property.
What is the Florida homestead exemption?
The Florida homestead exemption addresses one of the most expensive aspects of homeownership in Florida: property taxes. Property taxes are calculated based on the county appraiser’s assessed value of your home. Homestead exemption lowers your property tax bill by reducing the assessed value in a tiered manner. If you intend to purchase property in Florida as a permanent residence, you may be eligible.
The bottom line: The Florida homestead exemption can save you thousands of dollars in property tax payments.
Have questions or ready to get started? Our mortgage advisors can answer all your questions – from pricing, to title, to closing. Contact us to see how we can help you in your homebuying journey.
Newest Blog Posts
