You’ve probably heard stories about closing day: The mounds of paperwork, the legal terms, the way your arm will be sore by the end of the meeting.
It’s true: You’ll sign your name on lots of paperwork, and you’ll take what feels like a forest of paper home. Here’s what you’ll be signing when closing day comes:
- HUD-1 Statement: Outlines all of the costs related to the sale of the home for each party involved, including lender’s fees, escrows, insurance premiums, government recording charges, the survey, termite inspection, title insurance, HOA or condo dues, and title company fees.
- Mortgage Note: Your formal promise to repay the mortgage loan.
- Mortgage or Deed of Trust: Protects the lender’s interest in your property and allows them to take it back in foreclosure if you fail to pay the mortgage according to the terms agreed upon.
- Final Truth in Lending Disclosure: Shows any changes to the terms of the loan since you applied.
- Affidavits and Declarations: Declare various things to be true, such as that you’ll be using the property as your principal residence.
Sound overwhelming? A little bit of homework ahead of time can help you through the process.
Preview the documents: Ask for copies of the documents you’ll be signing before closing day, especially the HUD-1 Statement. Some agents will go through the documents with you beforehand to make sure you understand everything. Ask if yours will.
Ask questions: If you have questions as you review the documents, ask! Call your agent or settlement company. No question is too small, and there is no such thing as a dumb question. Ask away! And, don’t hesitate to ask questions during closing, too. Don’t sign anything you don’t understand.