What Documents to Expect at Closing
Here’s a list of all the documents you’ll be signing and receiving when you close on your new home.
At closing, you’ll likely spend up to an hour with the sellers, the title or escrow agent, your real estate agent, and possibly an attorney if you need one, reviewing and signing numerous documents before you officially take ownership.
These documents may vary depending on your home and other factors, but following are the main documents you can expect at closing.
Mortgage/Promissory Note: This outlines terms surrounding your mortgage and is your written promise to repay it. It will specify repayment details, including the amounts and penalties if you stop payments on your mortgage.
Deed of Trust: This document gives the lender a legal claim on your property if you stop repaying your mortgage.
Payment Letter or Escrow Disclosure: This document provides deeper details about your monthly mortgage payments, including how much goes to principal, interest, taxes, insurance and other components of your payments.
Loan Estimate: The Loan Estimate is the document you received within three business days of your accepted offer, and it includes the estimated interest rate, monthly payment details and total closing costs for the loan.
Closing Disclosure: Your lender is required to give you this form at least three business days prior to your closing day and it is included with all the other documents at closing. The Closing Disclosure covers similar types of information included in the Loan Estimate, however, it outlines the final details about your mortgage, including the loan terms, the interest rate, your projected monthly payments, as well as fees and other costs included with your mortgage. Tip: Be sure to compare the two documents prior to closing, and if you have questions, ask your lender for clarification.
Private Mortgage Insurance Disclosure: If your down payment is less than 20 percent of the home’s purchase price, your lender will likely require private mortgage insurance, which protects the lender (not you) if you can’t make payments on your mortgage. This disclosure outlines how and when you’ll make PMI payments, when you no longer need to make payments, and other rights and responsibilities.
Deed or Title: This document includes a legal description of the property, and transfers ownership from the seller to the buyer.
Affidavits: You’ll sign several legal documents that confirm the truth of various statements, including your identity, the legitimacy of your signature on signed closing documents, your employment, and your intent to use the home as your primary place of residence.
Servicing Disclosure: This statement identifies the lender servicing the loan, and acknowledges your understanding that the loan can be transferred in the future.
Declaration of Reports: This confirms that the buyer has reviewed inspection and survey reports associated with the property.
Certificate/Statement of Occupancy: In the case of new construction homes, this document indicates that the home is complete and safe to live in.
Flood Hazard Statement: This document confirms whether or not your home is in a flood hazard zone. If it is, you’ll need flood hazard insurance.
Once you’ve reviewed and signed all the closing documents, it’s official: you’re a homeowner! It’s time to celebrate and begin your new adventure.
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