A real estate closing is the day you finally get the keys to your new place. The end of the process of buying a home or other property, it is the final transfer of keys and money. This can be a confusing process for both buyers and sellers, especially if you’re a first-time buyer. Depending on the circumstances, there may be dozens of different forms needed during the closing, whether you’re buying the property outright or getting a mortgage to cover the costs.
If you’re taking out a mortgage, this will add several documents to the closing process. The first is the Truth in Lending statement, which outlines the interest rate, APR, and amount financed, and will also tell you the total cost over the lifetime of the loan. A similar document known as the monthly payment letter breaks down your monthly payment into the amounts paid towards the principal, interest, taxes, insurance, and other costs. The Real Estate Settlement Act, also known as the HUD-1 statement or Uniform Settlement Statement, is a required document that discloses all settlement costs.
In addition to these informational documents, there are several important forms to sign in order to receive the loan. The Note is the document that you sign agreeing to the loan and guaranteeing that you’ll pay back the amount borrowed. The document actually known as the mortgage puts a lien on the house as security for the loan, allowing the bank to foreclose if you don’t pay the loan.
Whether you are taking out a loan in order to purchase real estate or are paying for it outright, there are several documents needed to transfer ownership of the property. First is the deed, which is the document that transfers ownership of real estate. It contains the legal description of the property, along with buyers’ and sellers’ names. A ‘warranty deed,’ the most common type, is a deed containing the seller’s guarantee that he has the right to sell the property. The title is the official document that says who owns the property. There are a number of other documents that you will receive during the real estate closing, such as:
Don’t forget to bring money (in the form of a cashier’s check) to pay for any closing costs you are responsible for, along with photo ID. Finally, don’t forget to exchange all keys once you’ve signed the necessary documents at the closing.