After the initial escrow disclosure statement, they must also send you an escrow account statement on an annual basis. The mortgage servicing disclosure lets you know that your lender has the right to sell your loan to another loan servicer.
The loan servicer is who you make mortgage payments to each month. If your lender will not be servicing your loan, this document will outline pertinent information about the transfer and what to do should any issues arise. Even if your mortgage servicer does change, nothing else about your mortgage will be adjusted—only where you send the payments.
If you are refinancing an existing home loan, you will also find a right to cancel form in your closing package. As the name indicates, this form allows up to three days to cancel your new loan. This document contains information about when and how you can cancel your home loan and what happens if you decide to do so. Soon after, your mortgage lender will fund your loan. The main title document is the title insurance commitment the "Commitment" showing the party in title who owns the house , hopefully the seller.
It will also show all of the liens or other clouds on title. Your attorney if you've hired an attorney will review the Commitment to make sure that title is in the condition promised in the contract and otherwise acceptable under local law and custom.
If you are relying on an escrow company, it will review the Commitment to make sure title complies with the conditions stated in the escrow instructions created to satisfy the lender's requirements. If title is not acceptable, the seller might have to pay off additional liens, or obtain additional signatures.
Unexpected title issues could halt or delay your closing. If the seller does not have an attorney, or if local custom dictates, you might have to do more to ensure title will be good in time for the closing. In areas where it's common for neither party to work with an attorney, the title company often is the closer, and you'll likely have already been alerted if there is a problem with the title that could delay closing. Even when it's not customary to work with an attorney, if you have any questions or concerns about closing or title, consider hiring a local real estate attorney to review the Commitment and other title documents.
The title company will ask you to sign its standard closing documents. This will include an ALTA statement, which is a one-page affidavit very similar to the seller's affidavit of title; a judgment affidavit, where you list your recent judgments, divorces, or bankruptcies; a compliance agreement, in which you agree to cooperate with the title company to correct any closing mistakes; and a disbursement agreement, allowing the title company, as escrowee, to disburse the loan proceeds.
There may be additional disclosures informing you that an attorney is involved in the transaction, or that the lender has an affiliated businesses arrangement with the title company, or that the loan title insurance policy will not cover your interest as the buyer.
Conveniently, most closing agents provide digital copies of your entire closing packet. You'll also want to keep the original documents in a safe place, as you might need to provide them when you later sell the house, have to make an insurance claim , or are in another situation where you need to prove ownership. The most important originals are the purchase agreement, deed, and deed of trust or mortgage. In the event originals are destroyed, you might be able to get certified copies of these documents from the lender or closing company, but you don't want to rely on others' recordkeeping systems unless you have to.
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Grow Your Legal Practice. Meet the Editors. Before you're knee-deep in paperwork, orient yourself to what you'll be reviewing or signing. Real Estate Transfer Documents Most of the documents related to transfer of ownership of the property must be signed by the seller and delivered to you, the buyer. What Is Closing? Key Takeaways Closing is the final phase of mortgage loan processing in which the property title passes from the seller to the buyer.
During the closing process, also called settlement or account settlement, the participants review, authorize, and date numerous legal documents in order to signify the closing of the escrow account and complete the property purchase process. The Consumer Financial Protection Bureau has a list of all required closing documents, including the closing disclosure, promissory note, and deed of trust.
Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate.
You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. Title insurance protects lenders and homebuyers from financial loss due to defects in a property title, such as outstanding lawsuits and liens.
What Is a Deed? A deed is a signed legal document that transfers the title of an asset to a new holder, granting them the privilege of ownership. What Is a Deed of Reconveyance? Mortgage lenders issue deeds of reconveyance when the loan is paid off, releasing the borrower from any further obligation on the debt. There is no such thing as a standard closing procedure that is followed in all areas of the country. But in a nutshell, the closing is where you settle all the financial details associated with the purchase and receive the title to your new home.
Buyers and sellers often complete their paperwork in separate rooms and never see each other on the day of closing. At least 3 days prior to your scheduled closing date you will receive the Closing Disclosure, which provides the final loan terms and closing cost details. Review this document with a fine-tooth comb to be sure the details are correct! If something looks different than expected from the initial Loan Estimate, you should contact your lender.
Review all of your closing documents with your attorney to be sure there are no errors or problems before the closing begins. These documents will include:. Typically, the closing officer will begin by reviewing the Mortgage Note and the mortgage document and ask you to sign them, followed by the Closing Disclosure CD. The costs being paid by the sellers and the buyers will be itemized and include:.
The closing officer will then go over the summary of each party's transaction. The price of the home is listed at the top of both columns. Amounts are added or subtracted in both columns to arrive at the net amounts due from the buyer and due to the seller. After the closing officer has covered the entire Closing Disclosure, he or she will ask for a check for the down payment and closing costs.
When all of the buyer's documents have been explained and signed, the closing officer will move on to the seller's documents.
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