What Mortgage Documents Are You Signing? Part 2
The last blog post explored the key documentation that buyers could expect to see during the mortgage application and approval process. Once you’ve identified the right property for you and been approved for a mortgage, there are a number of other documents that you’ll need to sign at closing. While each mortgage or lender may include slightly different documentation, here’s a closer look at the core documents that buyers will see and sign on the day of their closing.
HUD-1 Settlement Statement
One of the key documents that your lender will provide you with is a HUD-1 Settlement Statement. This document specifically outlines the fees and closing costs associated with your loan. On average, buyers can expect closing fees to range from 3 to 7 percent of the loan’s total. Ask your lender for a HUD-1 Settlement that lists the time and date of closing, as well as the closing costs. This information may be useful when filing your taxes.
The Mortgage Note
During the final closing meeting, you’ll be presented with the mortgage note. During this meeting, all the paperwork is signed which provides you with legal ownership of your home. The Mortgage Note (sometimes just called The Note) is an agreement stating you’ll repay the mortgage according to the negotiated terms and it also outlines what happens if you default on the loan.
The Deed of Trust/Mortgage
The Deed of Trust/Mortgage is a legal document whereby the borrower transfers the title to the property to a third party as security for the lender. Once the loan is paid in full, the trustee transfers title back to the borrower. Essentially, this document confirms that the house is collateral for the funds that are being loaned to you; should you fail to repay your loan, it gives the lender the right to foreclose on the property or sell it to pay off the debt. The Deed of Trust also states that you’ll maintain a homeowner’s insurance policy and keep the house in good condition.
Deed, Affidavits, and Declarations
During the closing, the seller will sign the deed and transfer ownership of the house to all the buyers. While the deed will be held in trust until you’ve paid off the loan, you’ll receive a copy for your files. You’ll also be asked to sign affidavits and in some cases declarations, stating that the information you’ve provided is correct, that you’ll be living in the house, and that any repairs noted were made before closing.
Are you a home buyer in Las Vegas that’s considering financing a home? Contact Sydnee Johnson today to learn more about your options and to discuss any questions you might have, including what mortgage documents you need to sign.