What Documents Did I Sign?
Written by: Victor Muzzatti, Esq. of RGS Real Estate Settlements
What are all of those documents that I signed at closing? I feel guilty that I didn’t read any of them…
How many of you already purchased a home and have gone through the rigors of a settlement? How many of you, during the signing of those documents heard a voice in the back of your head saying “never sign anything without reading it first.” And the next thing you know, you’ve just signed 53 documents and barely looked at one! Well, let me just tell you that it’s okay if you didn’t read any of them, you are going to be just fine.
A real estate settlement is made up of a bunch of moving parts: you-the buyer, the seller, the agent that represents the seller and then your agent, sometimes the mortgage lender shows up and then there’s the settlement person (the one that makes you sign all of those papers). All of those papers are known as the closing documents. Those documents consist of a Closing Disclosure (that’s the page with all of the costs that are associated with your purchase), a deed (that transfers the title to the home), a note (which is the promise to repay the lender), a deed of trust or mortgage document (which is the document that gets recorded at the courthouse, along with your deed, that obligates you to pay back the loan), your loan application, a couple of documents that reflect your social security number, a bunch of documents that you have already signed once with your loan officer and then a bunch of documents that the lender wants you to sign that only protects the lender and tells you what you need to do to keep them happy.
So you might ask yourself “what’s really important in all of those documents that I should focus on?” I am glad you asked that question because it’s a really good one. When we conduct closings, we start off with the numbers – the actual costs associated with the purchase of the home. If you’ve been using a traditional mortgage lender, these costs should come as no surprise to you as you should have already gone over them with the loan officer three days before settlement. I will go over them again with the clients just to make sure that nothing significant has changed.
The second document that I go over is usually the monthly payment. That’s also not going to come as a surprise because the loan officer has already gone over that with you as well and hopefully that too is what you are prepared to see. The third, and probably the most important of them all, is the Note. This is the document that explains the terms of your loan; how much you are borrowing, the percentage rate, the monthly principal and interest, when the payment plan begins, when the payments are due and finally, how long of a term do you have by the time it’s all paid back. From that point on, we’re going to be signing a bunch of documents that are still important, but do not really touch on the specifics that we have just gone through; the money, the payment and the terms. One other thing that I do always point out is to make sure that your name is spelled correctly, that the address of the property that you are buying is correct and finally, that your social security number is correct, so you can receive the proper credit for those tax deductible items.
So the next time you find yourself at a real estate settlement, don’t necessarily worry so much about that voice in your head telling you to read every single word before you sign. Listen and look at the closing documents, ask questions to those things that you don’t understand, and realize that once you’ve gone through those first three documents, there’s very little that you can change from that point on to any of the rest of the documents. Good luck!
Posted in Buyers