From the time you start talking about buying a home, someone is sure to remind you about “the paperwork.” While there’s paperwork on the front end of a mortgage loan - albeit electronic today –  there’s much more paperwork, also known as closing documents, when it comes to closing day.

The main thing to remember when we meet with you for your closing is that these documents protect both you and your lender. The more you know about the paperwork ahead of time, the more prepared you’ll be to quickly get papers signed so you can be on your way to moving in the new home. 

There are several parts to the closing day paperwork which include: The note, the mortgage, the deed, closing disclosure, and affidavits and declarations.

The Note

The note (sometimes called a promissory note) is a document that promises you will repay the loan according to the terms outlined in the note.  It includes information about your home loan, including the amount you owe, any relevant repayment dates, and the total length of time for repayment. It also explains what can happen if you fail to make a payment on time.   

The Mortgage (or Deed of Trust)

The house you’re buying is the collateral you provide the bank for loaning you money to purchase your property. The mortgage or deed of trust is a legal document explaining this.

The mortgage gives you the right to live at the property, make improvements, resell it, and benefit from any equity gained in the property. The mortgage also states you must keep the house in good repair and maintain insurance on the property.  By signing this document, you give the bank the right to take back the property should you fail to repay your loan as agreed. If you default on the loan, the property can be sold to pay off the debt.

When the loan is paid in full, the bank will release their lien on the property, and you become the full-fledged owner.

Deed

The seller will sign the deed to transfer ownership over to you, and it will have the names of all the buyers on it

Closing Disclosure

This document breaks down the payments, closing costs and escrow items if you’ve chosen to open an escrow account.

Affidavits and Declarations

Affidavits and declarations are statements declaring all the information you provide is true, including that the property will be your primary residence and all repairs needed on the property were made prior to closing.

If you have questions about any of this paperwork, please give me a call at 217-747-5860.