Buying a home can be an exciting, yet overwhelming, experience. You will be required to sign numerous documents in order to complete the purchase of your new home. Whether you are a first-time buyer or just need a refresher, it helps to know what you can expect to sign at the closing. No two home sales are identical and you may have to sign additional documents, but these are the most common.
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You will need to sign a Promissory Note, which will come from your lender if you financed your home. The Promissory Note reflects your promise to repay the mortgage loan, and typically includes:
- Amount of the mortgage
- Interest rate being charged on the loan
- Amount of the monthly mortgage payment
- Due date
- Where the payment must be sent
Loan Estimate and Closing Disclosure
The Good Faith Estimate (GFE) and Truth In Lending (TIL) are documents that were once widely used prior to and at closing. However, due to changes in federal law, these have largely been replaced by two new documents—the Loan Estimate and Closing Disclosure.
The Loan Estimate is provided earlier in the process and should contain important details about your loan, such as the amount borrowed, terms of the loan, interest rate, and expected closing costs. The Closing Disclosure should be given to you at least three days prior to closing. It contains the same information as the Loan Estimate, along with any changes, so you are able to compare the information on the Disclosure to that on the Estimate.
Mortgage, Security Instrument, or Deed of Trust
Whether you sign a document referred to as a “Mortgage,” “Security Instrument,” or “Deed of Trust” will depend on the state in which you purchase the property. A Mortgage or Security Instrument secures the lender’s legal rights to the property in the event of a default on the loan. A Deed of Trust creates a trust account that holds the deed to the property until the loan is paid in full. This also secures the lender’s rights to the property.
You undoubtedly submitted a Loan Application form when you originally applied for the loan. However, the lender will likely require you to sign a copy of that application at the closing. The lender wants to confirm that your financial position has not changed since you applied for the loan. If something has changed, such as losing your job, the lender expects you to make that known before signing the document.
This document lists any payments the lender will make during the first year of your loan. Typically, this includes taxes and insurance.
Certificate of Occupancy
If you are purchasing a new home, you will need a Certificate of Occupancy to be legally allowed to move into the new construction. This document will be granted by the local government (city or county) following an inspection.
How to make your closing run smoothly with digital signatures
In today’s interconnected world, one way to make your closing more efficient and less stressful is to sign your closing documents digitally. With RocketSign, you simply add a document and drop in signature, text, and date fields. You choose who is able to view and sign the document and even have the option to share it with an attorney for review. Executed documents are securely stored so they can be accessed from anywhere at any time.
Ensure a successful closing to your home purchase
If you are purchasing a home, that purchase will likely be the most expensive—and important—purchase of your lifetime. Navigating the closing process can be stressful. If you have questions about the legal aspects of purchasing a home, including the closing process, you should ask an attorney.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.