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Experience At The Settlement Table

Well, it’s official, I own a house and my girlfriend’s car is dead. In the coming week or so you might see some posts about our trips to car dealerships, used car owners, and CarMax’s (we went today, it’s a great place). Until then, here’s a recount of Friday’s experience at the closing table with the sellers, their agent, my agent, and the closing agent – a representative of the title company.

At the closing table, all parties get together, sign about a million sheets of paper (many of which are copies of each other), and learning that you owe a few hundred thousand dollars for the next thirty years. Other than that, it’s a pretty stress-less, relaxing experience.

The Settlement Statement, prepared by the Title Company, is the most important document there because it outlines how much money changes hands, why it changes hands, and, if nothing else, it should be triple checked by you. As I mentioned in an earlier article, the Title Company didn’t know I was a first time Maryland homebuyer and so on the Settlement Statement it showed I was to pay my half of the Maryland Transfer Tax (about $750). A quick phone call remedied that. It added a few more sheets to what I needed to sign, but I think the tradeoff was fair 🙂

The rent back made things a little more complicated but not much so. The sellers pay whatever it would cost me to live there, so it includes the mortgage (principal + interest), taxes (which includes the Columbia Parks and Recreation Assessment), and HOA fees. Utilities and water remain in their name and we need to transfer them prior to moving in. The sum is then divided by thirty days, always regardless of actual number of days, to calculate a “per diem” basis. The sellers prepaid June and, at the start of July, they will prepay part of July – however long they intend to stay.

I received a large enough gift from my parents that I could pay down a decent portion of the second mortgage and I intend to do so once the sellers move out of the house. I wonder if the larger interest payment they are making now, which is on a larger principal, will carry over to cover some of the interest in subsequent months because I’m paying down the mortgage. I’ll have to look into that and see how the interest-heavy payments work with respect to a declining principal balance. I do know that if I prepay enough to “overpay” the interest, I don’t get anything back.

Well, that’s about it… the settlement was a breeze. Nick, the mortgage lender, showed up and gave us a bottle of wine in congratulation and we talked about perhaps going to Atlantic City one of these days (he plays poker too). Nick came through on the two week closing deadline, which is what I needed him to do, with good rates too (certainly not the lowest of the low – but competitive with LendingTree at the time). He also gave my girlfriend and me two tickets to Saturday’s Orioles game against Detroit (they lost). All in all, Nick and Equitable Trust were really good to deal with and I recommend them – especially if you’re under a time crunch.