Buying a home can be an exciting, yet overwhelming experience. You will need to sign numerous documents to complete the purchase of your new home. Whether you're a first-time buyer or just need a refresher, knowing what to expect when you close is helpful. No two home sales are the same and you may need to sign additional documents, but these are the most common.
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You'll need to sign a promissory note that comes from your lender when you've financed your home. The promissory note reflects your promise to repay the mortgage loan and typically includes:
- Mortgage amount
- The interest rate is calculated on the loan
- Monthly mortgage payment amount
- Due date
- Where the payment needs to be sent
Credit estimate and closing details
The Good Faith Estimate (GFE) and Truth In Lending (TIL) are documents that were widely used before and at the time of closing. However, due to changes in federal law, these have largely been replaced by two new documents – the credit estimate and the closing statement.
The credit estimate is provided earlier in the process and should include important details about your credit such as: B. the amount borrowed, the terms of the loan, the interest rate and the expected closing costs. You should be notified of the closing disclosure at least three days before the closing. It includes the same information as the loan estimate and any changes made so that you can compare the information in the disclosure with the information in the estimate.
Mortgage, security instrument, or trust deed
Whether you sign a document called a "mortgage," "security instrument," or "trust deed" depends on the state in which you are purchasing the property. A mortgage or security instrument secures the lender's legal rights to the property in the event of a loan default. A trust deed creates an escrow account in which the deed is kept until the loan is paid out in full. This also secures the lender's rights to the property.
You undoubtedly submitted a loan application form when you originally applied for the loan. However, the lender will likely require that you sign a copy of this application upon completion. The lender wants to confirm that your financial condition has not changed since applying for the loan. If something has changed, e.g. B. the loss of your job, the lender expects you to announce this before signing the document.
This document lists all of the payments that the lender will make in the first year of your loan. This usually includes taxes and insurance.
If you are buying a new house, you need a certificate of use in order to legally move into the new building. This document is issued by the local government (city or county) after an inspection.
How to ensure a smooth deal with digital signatures
In today's connected world, one way to make your closing more efficient and stress-free is to digitally sign your closing documents. With RocketSign you simply add a document and insert signature, text and date fields. You decide who can view and sign the document, and even have the option to send it to a lawyer for review. Executed documents are securely stored so that they can be accessed from anywhere, anytime.
Make sure your home purchase is completed successfully
When you buy a home, that purchase is likely the most expensive – and important – purchase of your life. Navigating the closing process can be stressful. If you have any questions about the legal aspects of buying a home, including the closing process, you should ask an attorney.
This article contains general legal information and not legal advice. Rocket Lawyer is not a law firm or a substitute for a lawyer or a law firm. The law is complex and changes frequently. For legal advice, please contact a lawyer.