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What Papers Should I Get At Or Before A Mortgage Loan Closing
We're often asked to explain certain aspects of the closing process when a home goes under contract. If you've never closed on a home, you may be overwhelmed, and maybe even uncertain what you're receiving on (and sometimes before) closing day. Today, we'd like to share with you a recap of the paperwork that you should expect to receive at or before your closing, and some explanation. We hope you'll find it helpful!
Federally-mandated documents and contractual documents
These key documents inform you of the key terms, provisions, and costs of your loan. They outline your key rights and responsibilities as a borrower, and record the transaction between you and your lender.
Federally-mandated documents include:
The HUD-1 Settlement Statement should show all of the costs of your loan, as well as who will be receiving payments from the loan. You will receive the HUD-1 at closing, but you have the right to request and the lender must provide it at least one day prior to closing.
The Truth-in-Lending (TIL) Disclosure lists costs of your mortgage such as how much you pay over the full term of the loan, what your mortgage payment will be initially, and the maximum payment under your loan. If your annual percentage rate (APR) changes enough to exceed regulatory requirements, the lender must give you a corrected final Truth-in-Lending disclosure.
The Notice of the Right to Rescind (if it is a refinance or home equity line of credit) makes you aware that if you are refinancing a loan, you have three business days from the lenders’ fulfillment of certain conditions to cancel your loan.
Tip: Please note that if the lender fails to give you two copies of the right to rescind or the Truth-in-Lending Disclosure, you continue to have the right to cancel the loan for up to three years.
The Initial Escrow Statement lists the estimated taxes, insurance premiums and other charges the lender anticipates paying from your escrow account during the first year of your loan.
Contractual documents include:
A promissory note describes what you are agreeing to. It provides you with details regarding your loan, including:
The amount you owe
The interest rate of the mortgage loan
The dates when the payments are to be made
The total amount you will pay
The length of time for repayment
Whether and how the payment amounts can change
The place where the payments are to be sent
A security instrument or Deed of Trust restates the basic information included in the Promissory Note, as well as explains your responsibilities and rights as a borrower, particularly that your house can be taken away by the bank if you fail to make agreed upon payments.
State/local government-mandated documents: These are documents that fulfill state and local government requirements, generally for the purpose of collecting information and/or protecting the consumer (e.g., Septic System Disclosure, Massachusetts)
Lender documents: These are documents added by the lender (e.g. Occupancy Affidavit)
From the article "What papers should I get at or before a mortgage loan closing?." http://www.consumerfinance.gov. Consumer Financial Protection Bureau, updated 10/10/2014. http://www.consumerfinance.gov. 1/12/15. <http://www.consumerfinance.gov/askcfpb/181/what-papers-should-i-get-at-or-before-a-mortgage-loan-closing.html>.
Holding a BS in Environmental Science, and MA in Education, real estate was not Shields Team Buyer Specialist Rayne Price's first career choice. It was only after encouragement from his wife and a cl....
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