What documents do I sign at closing?
What happens at closing?
Closing is the final stage in the long and often complex conveyancing process. By the end of your mutually chosen closing date, you will be the legally recognised owner of your new property. On this day, the title deed is officially transferred from the seller to the buyer. You are also sometimes able to move into your new property on this day too, depending on the specific needs of the seller, of course. Consequently, closing can be one of the most exciting and happiness inducing stages of the whole process. It can seem like the end is within reach but there are still many things to do on the day before the deal is finalised and the keys can be handed over to the buyer.
What do I sign?
Due to the fact that, during closing, ownership is legally transferred from one party (the seller) to the other (the buyer), there is inevitably a lot of paperwork that has to be signed, checked and officiated before closing can be finalised. The buyer has to sign a lot more documents than the seller. By the end of the day, they might even have signed their name at the bottom of 100 different documents. The main bulk of these documents will be those to do with securing and officiating your mortgage deal. Normally, at closing the buyer will have to sign a variety of documents including: the full bill of sale, the property deed, the tax declaration transfer, the mortgage details and the closing disclosure.
The most important documents either party will sign are the ‘deed’ and the documents which concern the mortgage which has been acquired in order to purchase the property. The ‘deed’ is arguably the most important document as it is a public record of the legal ownership of the property. It is signed by both parties and is an official written record of the seller transferring ownership, stakes and rights to the buyer. In terms of mortgage payments, there are two important documents that have to be signed before closing. One of them is known as ‘the note’. It is basically a document which outlines the agreement which you have made with your lender and it includes interest rates, the property details and at what intervals and what amount you will pay. The second document is the mortgage document and although it is distinct from the note as it includes more details on your potential property, it does have many similarities. The mortgage document basically outlines an agreement between you and your lender should you ever fail to make your payments. This can include your house being seized if you are unable to make the conditions of your loan.
Therefore, it is clear that closing involves a lot of complex legal and financial documentation. It is important that you have all your documents and fees ready to go well in advance to ensure that everything goes off without a hitch.