What The Buyer Should Consider When Scheduling A Closing

Signing At Your Real Estate Closing

"Sign Here ... And Here ... And Here." Most closings are actually two Closing">closings. You'll be closing on the purchase of real estate, and you'll be closing on the Mortgage loan you are taking to buy that real estate. All that paperwork will have to do with one or the other. Some documents are common to most closings, and other documents will be unique to your area or situation.

Mortgage documents you can expect to see, read and sign, will include:

• Truth in lending statement, also known as Regulation Z. This important piece of paper will disclose the Interest Rate, annual percentage rate, amount financed and the total cost of the loan over its life. Check and double these important numbers before signing. This is not a time for surprises.
• Itemization of amount financed. This document is like an addendum to the Truth in Lending statement. It summarizes the finance costs, such as Points.
• Monthly Payment letter. This document reveals the break down of your monthly payment into Principal, interest, taxes, insurance and any other monthly escrows. *Note: This is where you're actually borrowing the money and giving your personal Guarantee to pay it back.
• Mortgage. This paper puts a Lien on the house as Security for the loan allowing the bank to foreclose if you Default on the note mentioned above.

Then, there are the real estate documents that will finally make the house yours. These include:

• HUD Form 1 or Disclosure/Settlement Statement. This is another one to read carefully (though, of course, all these papers are important and need to be read). The form will contain all the actual Settlement Costs and amounts. Be aware that this document could have many typos and errors. The closing agent will go over this document with the buyer and seller. Make sure that you pay attention.
• Warranty Deed. This is the document that brought all these people to the table. This document should include the names of the buyer, the seller and a description of the property. Often this deed also guarantees that the seller has the right to sell the property. With the signatures of the seller and buyer, this piece of paper transfers the Title of property. Savor this particular signing; it's the real deal.
• Pro-ration agreements. These describe how you and the seller are dividing up the costs of the house for the month in which it is being bought. For example, the seller may have already paid the property taxes, so the buyer needs to reimburse the seller for the portion of the Tax bill that covers the time after the buyer takes over the property. Or in reverse, the seller may not have paid the quarterly home owner's association fees yet. The buyer will be paying this, but at the closing, the seller reimburses for the period he was still living in the house. In the end, lots of little bits of money may go back and forth across the table, at least on paper.
• Tax and utility receipts. You'll probably also be signing various city and state receipts acknowledging that this or that has been paid by the seller or will be paid by the buyer.
• Name affidavit. This document is certifying that you are who you say you are.
• Acknowledgment of reports. More legal documents assuring that the buyer has seen all of the reports regarding the property. These can include surveys and a termite inspection.
• Search or Abstract of Title. The abstract gives a listing of every document that has been recorded about this particular piece of property. Don't worry, this doesn't obligate you to anything, but it does give you the history of the house.

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