November 9th, 2015 6:33 AM by Jackie A. Graves, President
If you’re buying a home, it’s
likely you’ve heard about “the paperwork.” Indeed, there’s a lot of
paperwork involved in the homebuying process, but this is probably the largest
purchase you’ll ever make and the paperwork is put in place to protect you, your
home and all parties involved in the transaction.
The best way to get comfortable with the documents and understand
what you’re signing is to get familiar with the forms and understand what you
can expect – before and at closing.
Forms You’ll See Prior to Closing
Buyer Representative Agreement: When you engage a
real estate agent to help you buy a home, they may ask you to sign a Buyer
Representation Agreement. This is a legal document that formalizes your
working relationship with your agent.
Uniform Residential Loan
Application [PDF]: This is your mortgage loan application that captures information
about you, your finances, and details of your potential mortgage. You’ll be
required to provide information about your monthly income, combined household
expenses, assets and liabilities, and personal information such as your social
security number and marital status. This information will help your lender
assess your ability to pay your mortgage.
Purchase Agreement [PDF]: Once your offer to purchase a home is accepted by the seller, a
purchase agreement is drawn up. This agreement typically includes all details
of the purchase, including the names of the buyers and sellers, total purchase
price, commission payable to the real estate agent, and requested closing date.
The purchase agreement is used to secure financing from the lender, and is
submitted as part of the closing paperwork.
Loan Estimate [PDF]: Within three
business days after completing your loan application, your lender will give you
a Loan Estimate that should reflect the particular loan you discussed –
including all terms and associated costs due at closing. Consider exploring
your loan options from several lenders and choose the loan that is best for
In October 2015, the Know Before You Owe mortgage
rule went into effect, replacing four disclosure forms with two new ones to
provide greater transparency and make the mortgage process
The Most Important Forms You’ll Sign at Closing
Closing Disclosure [PDF]: This form provides all of the actual fees, costs and credits
associated with closing your loan. Your lender is required to provide you
with the Closing Disclosure 3 business days before your scheduled closing to
review and ensure that the loan terms and costs align closely with those
provided in your Loan Estimate.
The Promissory Note [PDF]: This is the legal document you sign agreeing to repay the loan
according to the terms to which you agreed. It outlines the details of the
loan, the dates when payments are to be made and where payments are to be
sent. It also explains what can happen if you fail to make a payment on
Deed of Trust [PDF]: By signing this document, you are giving the lender the right to
take back the property by foreclosure should you fail to repay your loan as
agreed. This document also explains your rights and responsibilities as a
Deed: The seller will sign the deed to transfer ownership over to you,
and it will have the names of all the buyers on it. Your title will be held
with a third-party trustee until you have paid for the house in full. You will
receive a copy of the deed at closing.
Declarations: These are statements
declaring all the information you provide is true, including that the property
will be your primary residence and all repairs needed on the property were made
prior to closing.
Remember to lean on your team with any and all questions – you have
the right to understand everything you are signing!
Follow this series to learn what to expect about other important topics and visit My Home by Freddie MacSM
where we discuss it all.
By Freddie Mac – To view the original article click here