Frequently Asked Questions
What documents will I be required to sign at closing?
On closing day anyone named on the Deed of Trust and Note must attend the closing to execute the documents. Documents will vary depending on the type of transaction. The following is a general list of the documents to be signed at closing:
HUD-1 (Settlement Statement)
This form, required by federal law, itemizes the charges and credits to be given to the buyer and seller. It will also indicate the amount of money the buyer needs to bring to closing. The settlement statement is completed by the title officer who conducts the closing and both the buyer and seller must sign it.
The mortgage note represents your promise to pay the lender according to the agreed terms and any penalties assessed for default. Again, the terms of the loan are set forth, including the date on which your payments must be made and the location where they must be sent.
Deed of Trust
The mortgage of "deed of trust" is the legal document that secures the note and gives the lender a claim against your house if you default on the note's terms. In effect, you have possession of the property, but the lender has partial ownership, called an encumbrance, until the loan has been fully repaid.
Truth-in-lending (TIL) Statement
The Truth-in-Lending Statement is required by federal law. It must be provided to all loan applicants within three business days of receiving their initial application. It discloses the annual percentage rate (APR), which reflects the cost of your mortgage as a yearly rate. This rate may be higher than the interest rate stated in your mortgage because the APR includes any points, fees, and other costs of credits. The TIL Statement also sets forth the other terms of the loan, including the finance charge, the amount financed, and the total payments required.
You may be asked to sign numerous affidavits where you, the buyer, promise that you intend to occupy the home, that there are no side agreements between you and the seller, that you did not borrow money for your down payment, that you are still employed and that you agree to sign or initial corrected documents or sign any necessary additional documents. The seller will also sign an affidavit that to the best of their knowledge, no other liens or title disputes exist against the property.
The Warranty Deed
The seller signs this document to transfer title to the buyer. It contains the legal description of the property being transferred and is recorded in the county courthouse where the property is located