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The closing is the time
at which the property is formally sold and transferred from the
seller to the buyer. It is at this time that the borrower takes
on the loan obligations, pays all closing costs, and receives title
from the seller. One of our most important roles is to attend the
closing with you to be sure all the documents are prepared and executed
correctly and to explain the meaning of each document before you
sign it.
We will attend to virtually
all of the details surrounding this aspect of the transaction, including
alerting you in advance of the items you will need to provide when
you arrive.
The following are only
some of the documents you are likely to see at your closing:
Promissory
note:
The promissory
note is the document that establishes your obligation to repay the
money that you borrow to buy the property. It sets forth the interest,
term of loan and amount of monthly payment.
Mortgage:
The mortgage
establishes the lien against the property and has the effect of
securing the promissory note. It will be recorded in the land records
with your deed and allows the lender to foreclose if you are in
default with the promissory note.
Truth-In-Lending
Disclosure:
Discloses the annual percentage rate of the mortgage over
the loan's term. Also discloses grace periods and penalties for
late payments, any prepayment penalties and various other information.
Loan
Application:
You will be asked
to sign the final typed version of your loan application (you may
have already prepared a handwritten form earlier).
Payment
Letter:
Tells the buyer the breakdown and amount of the first payment
and when it is due and where it is to be sent (This sets forth the
actual amount of the principal and interest plus escrow for PMI,
insurance and taxes).
Name
Affidavit:
To the effect that various variables of one's name are nonetheless
one and the same person.
Warranty
Deed:
A written instrument duly executed and delivered by the seller for
the purpose of conveying title to real estate. The Warranty Deed
contains a covenant whereby the seller agrees to protect the buyer
against any claim to the property not recited in the deed. The original
will be recorded in the town or city land records.
HUD
Settlement Statement:
Is a document
which is prepared upon a form developed by the U.S. Department of
Housing and Urban Development (known as HUD) specifying all costs
and expenses of the transaction and particularly reflecting the
exact purchase price, amount of the loan, various closing costs,
actual source of all funds used by the buyer/borrower, as well as
the net proceeds due seller, after deducting the expenses of sale.
The information
you obtain at this site is not, nor is it intended to be legal advice.
You should consult an attorney for individual advice regarding your
own situation.
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