Frequently Asked Questions

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What is a Security Deed?

In Georgia, almost every mortgage lender will have the borrower sign a Security Deed at closing.  Even though we commonly refer to the Security Deed as the Mortgage, it is different. Borrowing money to purchase a house requires both a Promissory Note and a Security Deed.  The Promissory Note contains the terms of the loan and creates personal liability for the borrower to pay the loan back.  The Security Deed puts the house up as collateral for the loan and is similar to a Deed of Trust that us commonly used in other states.

The Security Deed passes a portion of the title to the lender as security for the loan.  The lender does not have any right to occupy or enter the property (except to inspect improvements if it is a construction loan).  The main difference between a Mortgage and a Security Deed is how each one is enforced and foreclosed.  The Security Deed in Georgia requires specific notices be sent to the borrower that include the specific default along with a publication of the foreclosure notice. Security Deeds do not require any judicial procedures, unless the lender seeks a deficiency judgment after the foreclosure.  A Mortgage is still legal and enforceable in Georgia, but it would require a judicial process for the lender to foreclose on the real property.  A Mortgage costs more and takes a lot longer to foreclose. As a result, almost every lender in Georgia uses the Security Deed, despite the fact that everyone still refers to it as the Mortgage.

Why is my mortgage payoff more than the loan amount listed on my mortgage statement?

Mortgage payments are made in arrears.  This means that your payment due April 1st actually covers the principal and interest due for the month of May.  The amount on your mortgage statement is simply your principal loan amount and includes no interest. Normally, the payoff includes almost a full month’s interest and is thus significantly higher than the principal loan amount.  The payoff will also include a fee charged by the lender for providing the payoff statement plus the recording fee to record the cancellation at the county courthouse.

For FHA  loans, interest is collected for a full month and there is no daily interest.  If the payoff is made on the second day of the month, the full month’s interest is due to the lender.  It makes a lot of sense to refinance or sell a house with an FHA loan at the end of the month in order to avoid paying interest on both the new loan and the old loan.

As a seller, how will I receive my funds?

We can provide a check or a wire. We recommend a wire if you need access to the funds immediately because banks often put holds on checks for large amounts.  We do not charge a fee for sending a wire, but often your bank will charge an incoming wire fee of $20 or $25.  In order to send a wire, we would need a voided check or bank statement of the account receiving the funds.

Why is the Annual Percentage Rate higher (APR) than my interest rate?

APR is the interest rate plus mortgage insurance (if any) and prepaid finance charges shown as a yearly cost.  If the loan has an adjustable interest rate, the APR is an estimate because the rate can change over the life of the loan.  APR is normally higher than the interest rate because most loans have costs, even if the lender is not charging anything.  APR is normally higher when the term of the loan is shorter (15 year vs. 30 year) because the prepaid finance charges are spread out over a shorter period of time.

I own the house with my spouse, but I am going to be the only one on the loan. Who needs to be at closing?

Everyone on title will need to be at closing.  Even when only one person is personally liable for the debt, all the owners must sign the Security Deed and a few other closing documents to secure the lender’s interest in the property for the loan.

How can I estimate the number of months to be collected in escrow for county taxes?

Use the escrow table below to estimate the number of months to collect in escrow for the specific county. This includes a 2-month cushion. Counties may change their due dates at any time.

Month of Closing

CountyJanFebMarAprMayJunJulAugSepOctNovDec
Cobb6789101112132345
Clayton5678910111213234
DeKalb5678910111213234
Fayette5678910111213234
Fulton6789101112132345
Gwinnett5678910111213234
Henry5678910111213234
Rockdale5678910111213234
I plan to do a cash-out refinance. When would I receive the proceeds?

There is a mandatory three day right of rescission period when refinancing owner-occupied real estate. Your loan would fund after a full three days have passed since you signed all the closing documents. During the three days, the borrower may cancel the loan. The three day rescission period does not apply to investment property or purchases.

What is the difference between a Warranty Deed and a Quitclaim Deed?

A Warranty Deed includes language where the grantor promises they are the actual owners of the property they are selling and conveys a warranty of title. A Quitclaim deed is a release of any claim or interest in the property that the grantor may have. Quitclaim deeds are often used by lenders to release a Security Deed. When purchasing real estate, it is preferable, and often required by the lender, to get a Warranty Deed.

When can I file for my Homestead Exemption?

The filing times have recently been changed. Most counties will now accept Homestead filings all year. It is important to know that you must own the property by January 1st of that tax year in order to receive the benefit of the Homestead Exemption. Each county has different procedures and many offer on-line filing. Check with your county tax commissioner to learn the cut-off date and procedure for getting your homestead exemption. Most counties also offer other exemptions for veterans and the elderly.

Here are links to the Homestead Exemption information for Metro Atlanta counties:

I own the real estate with another person, what happens when one of us passes away?

This depends. First you need to look at the “tenancy” on the deed in which you purchased the property. If you are “Joint Tenants, with full rights of survivorship,” then the surviving owner receives full ownership of the property. If you intend for your spouse or partner to get the property if you pass away, it is very important to include the “Joint Tenancy” language in your deed. Otherwise, the property must go through the Probate Court to determine who should receive the deceased’s interest in the property.

Am I required to purchase an Owner’s Title Policy when I purchase real estate?

No, but it is highly recommended. Unless you are paying cash for the real estate, the lender will require you as the borrower to buy a Lender’s Title Policy. The Lender’s Policy only protects the lender. When the Lender and Owner’s policies are purchased simultaneously, the Lender’s Policy is offered at a large discount. Instead of paying for a Lender’s Policy, which provides no protection to the owner, it is better to pay a small amount more for an Owner’s Policy and receive a benefit for paying the premium. It is also a good idea to inquire about possible extended coverages.

I need to bring money to closing. How should I send the funds?

Georgia’s ‘Good Funds’ law requires that all amounts over $5,000 be sent by wire or transfer. We will accept certified checks for amounts between $1,000 and $5,000 and a personal check for amounts less than $1,000.

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Since 2003, John C. Bennett has performed thousands of closings.

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