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During the closing both you and the seller will encounter and sign
many forms. Below is a list of the most common:
Truth-in-Lending Statement:
Also known as Regulation Z document. Contains the full disclosure of
the annual percentage rate, amount financed and the total cost of the
loan over its life. Signed by the buyer.
Itemization of Amount
Financed: Summarizes and explains the prepaid finance costs -
which are subtracted from the total loan amount - mentioned on the
Truth-in-Lending statement. Signed by buyer.
HUD-1 Settlement Statement:
Itemizes the details of the financial transaction between the buyer
and the seller. Contains all real estate closing costs, plus costs to
the borrower. Signed by the buyer and seller.
Monthly Payment Letter:
Shows the total monthly payment, itemizing the portions for principal,
interest, taxes, insurance premiums and other monthly escrows. Signed
by the buyer.
Promissory Note: The
actual agreement between the borrower and lender, explicitly stating
the terms of the loan including the amount, interest rate, and terms.
In effect, this is an IOU. Signed by the buyer.
Mortgage: A document
showing that a lien is being placed against a property. It allows the
lender to foreclose the property in case the borrower defaults. Signed
by the buyer.
Warranty Deed: The
document that transfers the title of the property from seller to
buyer. Signed by the seller.
Tax Proration Agreement:
Buyer and seller agree to cooperate in re-prorating the property taxes
in the following year once the actual bill is known. In theory, taxes
should be re-prorated with every deal. In practice, this agreement is
invoked only when there is a major change in the property tax bill.
Signed by buyer and seller.
Homeowner's Dues Proration
Agreement: Same as the tax proration agreement, except that
it addresses homeowner's dues. Signed by buyer and seller.
Name affidavit:
Certifies that the parties at the closing are known by the names they
are using in the transaction. If one of the parties has a former name
or did business under another name, the affidavit makes that fact
known. Signed by buyer and seller.
Acknowledgment of survey and
termite reports: Assures that buyer has seen the survey and
termite reports. Signed by the buyer.
Borrowers affidavit:
Requires borrower to state that they have not altered the property in
any way that might cloud the title. Signed by the buyer.
Seller's affidavit:
Requires sellers to state that they have not altered the property in
any way that might cloud the title. Signed by the seller.
1099-S form: An
Internal Revenue Service form that reports the gross proceeds from the
transaction. Signed by the seller.
Confirmation of payoff:
A report of where money is being paid to redeem liens placed against
the property. Signed by the seller.
Non-foreign owners notice:
Notifies the buyer that if the seller is a foreigner and leaves the
country without paying income taxes on the transaction, the buyer is
liable for the taxes. Also known as the FIRPTA document. Signed by the
buyer.
Compliance Agreement:
Requires buyer and seller to state that if there are unintentional
typographical errors on any of the documents, they both will cooperate
to correct changes in the documentation. Signed by the buyer and
seller.
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you come across something that would contribute to this section.
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