A Real Estate Closing largely consists of signing documents and transferring funds. Being familiar with the documents involved in the Closing will help you to know what to expect. Here is a general overview of those documents:
HUD-1 Settlement Sheet: The HUD lists all of the services to and costs owed by both the buyers and sellers. This document is usually reviewed before the actual Closing so that you are prepared in advance to handle your closing costs.
Truth-in-Lending Statement: The buyers’ lender should have provided this document to the buyers before the Closing. Because the APR of your mortgage can change at the time of Closing, it is important to have it prior to the meeting.
Promissory Note: The Note is the buyers’ promise to the lender to repay the loan according to the terms of the mortgage and details the penalties that result at any failure to fulfill the obligations of the mortgage.
Mortgage: While you receive possession of the property at the time of Closing, the lender also gains an ownership interest (an encumbrance). The mortgage secures the legal rights of the lender.
Affidavits: Various affidavits might be signed by both the buyers and sellers that verify terms of the contract, such as necessary improvements to the property being made by the sellers prior to Closing.
Deed: After the sellers sign the Deed, ownership is transferred to the buyers. After the Closing, the closing agent or attorney will record the Deed at the proper government office.
Costs: Various costs are involved in a Real Estate Closing. These costs include the filing of official documents, attorney’s fees, taxes, title research, etc.
Purchasing real property is a complicated process that involves many documents. If you are planning to purchase or to sell a home, call Ross & Ross at (814) 274-8612 to let us do the heavy lifting.