Q: Why do I pay interest from the day before closing on my new loan?

A: The California Good Funds Law states that all funds must be deposited with the title company the day before recording. Interest begins to accrue from the date of deposit.

Q: If I already made my March mortgage payment, why am I paying interest from March 1st?

A: Interest is paid in arrears.

Q: What period do property taxes cover?

A: 1st Installment taxes cover July 1st through December 31st. 2nd Installment taxes cover January 1st through June 30th.

Q: If my 1st Installment taxes do not have to be paid until December 10th then why do I have to pay them at close of escrow on November 1st?

A: The 1st Installment taxes become due November 1st therefore they are payable at the time of close of escrow.

Q: If the termite work is not done by close of escrow and the money must be held from the seller's proceeds do we have to notify the new lender?

A: Yes. In order to hold funds in escrow we need mutual instructions from both buyer and seller. Any instructions given by the buyer must be approved by their lender.

Q: If I am not paying for the termite report, why do I have to sign it?

A: Both buyers and sellers must sign all reports and inspections deposited into escrow regardless of who is responsible for payment.

Q: If the title company records first thing in the morning, why is it that I cannot pick up my proceeds check until after 12:00?

A: Due to the large number of title companies it takes several hours for the county to report to the title company that the documents are confirmed recorded. The title company cannot release funds until this confirmation is received.

Courtesy of First American Title