The closing of a mortgage loan is an event within itself. There is money to be dished out and you will also sign what appears to be a boat load of papers. This is final step in a long process to become an official homeowner.
When you are at a closing there will be a number of people taking part, including the seller, lender, attorneys, title company representative, real estate agent and you all assembled to sign papers and take care of the necessary costs involved in order for the real estate transaction to be completed.
You will be given a good faith estimate of the closing costs that you will be required to pay and they normally range any where from 5% to 10% of the total loan amount. If you want more information then ask your lender for a handy government guide which is called “Settlement Costs”. This document can also be obtained from the HUD office in your area.
Some of the documents you will be signing include the following:
Of course there will be a mortgage document to sign which basically is a legal document which outlines your agreement with the lender, a legal description of the property and the dollar amount of the mortgage.
The Truth-in-Lending Statement
This document shows the actual cost of the loan. Also included is the amount of the loan, the finance charges that you will pay if you keep the mortgage outstanding for the entire term of the agreement. The annual percentage or APR represents the interest rate plus fees and points.
A title search is done on the property to make sure the title is not clouded. In other words it makes sure there are no liens, judgments, mortgages, mechanic liens or any type of claims against the property. If there are they will have to be dealt with before the transaction can continue.
The majority of lenders require that there be title insurance which basically guarantees the research which was done by the title company.
Proof of Insurance
You will be asked to provide proof that the home has adequate insurance coverage during the closing.
The note outlines in descriptive language the terms of your mortgage including what’s the amount due? When is it due? The note also includes information about what happens if you are late or if your default. You will also be notified if there is a late fee and how much. However, you can speed up the notification process with the help of docker.com.
Certificate of Occupancy
This document is issued by a local authority which basically attests to the fact the home is ready to be occupied and is hazard free.