The Life of an Escrow

Understanding your escrow transaction

Buying A Home

rentvs.buy
Why pay rent When you could build equity in a home.
SELLER SELECTS A REALTOR SHOwING & SELLING SELECTS HOME AND SUBMITS CONTRACT wITH LOAN STATUS REPORT (LSR) REVIEwS AND ACCEPTS CONTRACT FROM BUyER

BUYER SELECTS A REALTOR

START have you ever considered how much you pay in rent over an extended period of time? it is probably a lot more than
you realize. the amount you spend for rent each month could be applied to a mortgage, not only building

BUYER GETS PRE-APPROVED By LENDER you pay each year. IF NEw LOAN NEEDED

equity in your own property, butin most casessubstantially reducing the Federal and state income taxes SELLER PREPARES HOUSE FOR and what happens to your rent money? its gone! theres no interest, no equity, no return.

interest rates are still low, and you may be surprised at what you can afford. to determine your home-buying ability,
VIEwS HOMES wITH REAL ESTATE PROFESSIONAL

call your real estate agent or lender. the consultation is freeno strings attachedso make the call today! BUYER BUYER SELLER

INSPECTION REPORTS SENT TO APPLICABLE PARTy, REVIEwED AND NOTIFICATION SENT

rent : your investment and return

VARIOUS INSPECTIONS ORDERED

ESCROw OPENED AND PRELIMINARy REPORT ORDERED

monthly payment

after

1 y ear

after

3 y ear s

after

5 ye a r s

after

10 ye a r s

after

15 ye a r s

yo u r r e tu r n
BUYER

PRELIMINARy REPORT RECEIVED $ 400 4,800 AND APPROVED By BUYER

14,400 18,000 21,600 25,200 28,800 32,400 36,000 39,600 43,200 46,800 50,400 54,000 63,000 72,000 90,000

APPRAISAL ORDERED By 24,000 & COMPLETED FOR LENDER

48,000 60,000 72,000 84,000 96,000 108,000 120,000 132,000 144,000 156,000 168,000 180,000 210,000 240,000 300,000

72,000 $0 ADVISES ESCROw COMPANyOF 90,000 108,000 126,000

HOME INSURANCE COMPANy

$ 500 $ 600

6,000 7,200

30,000 36,000 42,000 LOAN DOCUMENTS PREPARED By LENDER & SENT TO ESCROw 48,000 54,000
BUYER DEPOSITS REQUIRED FUNDS 66,000

$0 $0

8,400 CLOSING $ 700 DOCUMENTS COMPILED By ESCROw COMPANy $ 800 $ 900 10,800

9,600

BUYER $ 0 RECEIVES FINAL LOAN 144,000 APPROVAL FROM LENDER $0

162,000 180,000

$0

$ APPOINTMENTS SET: 12,000 SEPARATE1,000 BUYER & SELLER $ 1,100 13,200 SIGN DOCUMENTS $ 1,200 $ 1,300 14,400 15,600

60,000

$0 LOAN DOCUMENTS RETURNED 198,000 TO LENDER FOR$REVIEw 0 216,000 234,000 $0 $0

72,000 78,000
LENDER "FUNDS LOAN" 84,000 (SENDS FUNDS TO ESCROw)

DOCUMENTS RECORDED $ 1,400 AND ESCROw CLOSED 16,800

$ 1,500 $ 1,750

18,000 21,000

90,000 105,000
BUYER 120,000 RECEIVES KEyS FROM REAL ESTATE PROFESSIONAL

270,000 315,000 360,000 450,000

ESCROw COMPANy ENSURES ALL 252,000 CONTRACT CONDITIONS $0 HAVE BEEN MET

$0

$0
FINAL DOCUMENTS $ SENT TO 0 INTERESTED PARTIES

AFTER RECORDING, CONFIRMED $ 2,000 24,000 ESCROw COMPANy DISBURSES FUNDS

$ 2,500

30,000

150,000

$0

ANDY GONZALES
REALTOR A & L ARIZONA REALTY DIRECT 480.242.3313 Andy@alarizonarealty.com www.alarizonarealty.com
First American Title Insurance Company makes no express or implied warranty respecting the information presented and assumes no responsibility for errors or omissions.
SWD-NACA - 07/2011

FIRST AMERICAN TITLE AHWATUKEE 4435 E. Chandler Blvd. Ste. 100 Phoenix, AZ 85048 DIRECT 480.753.4424 | www.ThinkFirstAmerican.com
2012 First American Financial Corporation. All rights reserved. | NYSE:FAF

MORTGAGE PAYMENT

PRINCIPAL & INTEREST

30-YEAR LOAN

LOan aMOUnt
$80,000 $90,000 $100,000 $120,000 $140,000 $160,000 $180,000 $200,000 $220,000 $240,000 $260,000 $280,000 $300,000 $400,000 $500,000 $600,000 $700,000

Interest rate
5%
429 483 537 644 752 859 966 1074 1181 1288 1396 1503 1610 2147 2684 3221 3758

5.5%
454 511 568 681 795 908 1022 1136 1249 1363 1476 1590 1703 2271 2839 3407 3975

6%
480 540 600 729 839 959 1079 1199 1319 1439 1559 1679 1799 2398 2998 3597 4197

6.5%
506 569 632 758 885 1011 1138 1264 1391 1517 1643 1770 1896 2528 3160 3792 4424

7%
532 599 665 798 931 1064 1198 1331 1464 1597 1730 1863 1996 2661 3327 3992 4657

7.5%
559 629 699 839 978 1118 1258 1398 1538 1678 1818 1958 2098 2797 3496 4195 4895

8%
587 660 734 881 1027 1174 1321 1468 1614 1761 1908 2055 2201 2935 3669 4403 5136

8.5%
615 692 769 923 1076 1230 1384 1538 1692 1845 1999 2153 2307 3076 3845 4613 5382

9%
644 724 805 966 1126 1287 1448 1609 1770 1931 2092 2253 2414 3218 4023 4828 5632

How MucH

HOME
afford?

You can

This formula is only a guide and noT To be consTrued as acTual lending calculaTions. contact your loan officer to determine more accurately what price range you should consider. lenders abide by certain ratios when calculating the loan amount their customers can qualify for and the ratios vary by lender and loan program. many use 28% of your gross monthly income as the maximum allowed for your mortgage payment (principal/interest/taxes/insurance or piti); for your total monthly debt, the ratio is 36%. total monthly expenses means piti plus long-term debt (such as auto loans) and revolving/ credit-card debt. do not include other expenses such as groceries, utilities, clothing, tuition, etc., to calculate this ratio.

monthly payments on accounts, auto, credit card, loans + + + + + = total monthly debt (A) ________________ ________________ ________________ ________________ ________________ ________________

monthly alloWable total debt minus monthly debt = monthly alloWable piti less 20% For taxes & insurance) = alloWable principal/interest only Gross monthly income = monthly alloWable piti (less 20% For taxes & insurance) = alloWable principal/interest only payment: enter lesser oF (E) or (G)

(C) (A) (D) (E) (B) (F) (G) (H)

________________ ________________ ________________ x .80 ________________ ________________ x .28 ________________ x .80 ________________ ________________ ________________ .80 ________________ ________________ .90 ________________

Gross monthly income beFore taxes (B): ________________ x .36

= alloWable ________________ total monthly debt (C)

usinG chart above, Find current interest rate. locate payment amount in that column close to your principal and interest (H). Find loan amount to the leFt and enter here.

loan amount For 20% doWn = home price loan amount For 10% doWn = home price