Closing Documents

In essence, there are two closings: The Mortgage and The Sale.

Mortgage Documents
Different lenders require different documents. Your attorney will explain each of them and ascertain that everything is signed. The most critical documents will be:

• The Note
  This is a contract with the lender by which you agree to repay the loan with interest as specified.
  
• The Mortgage
  The mortgage provides the lender with a claim against the home you are purchasing as security for the note.
  
• Truth-in-Lending Form
  This form confirms that your lender has disclosed all loan costs to you, in accordance with legal requirements.
  
• RESPA
  RESPA stands for “Real Estate Settlement Procedures Act”, essentially a declaration that you understand the closing procedure.
  
• Closing Statement (HUD-1)
  This is an accounting of all amounts due to/from the buyer and seller. It lists all uses of the sale proceeds, including payoff of the seller’s mortgage, apportionments for taxes, real estate commissions, attorney’s fees, etc.

Sale Documents
Often there are only 2 or 3 documents involved with the sale, the primary one being:

• The Deed
  The deed conveys the property from the seller to the buyer, both of which must be legally named in the document. In addition, the deed specifies the date and price of the sale, along with a detailed description of the property and the manner in which title will be held.