When you’re about to get to the closing table and sign the documents on your house, there will be plenty of papers you’ll need to consider. Most everything that’s required of you will be requested by your lender. You also want to look carefully at the closing documents and make sure you understand everything. You’ll get a HUD-1 statement, which details everything that you and the seller are paying or receiving. That way you can ensure that the numbers are right. That’s not the only paper you want to look at, though. Here are some other forms you might need or be required to sign as a buyer.
1). Do you have loan information for any mortgages or liens?
Most people have a mortgage when they buy a house. If you’re one of those people, you’ll sign your mortgage documents at the same time you sign the other closing documents for the home. That’s also true for any kind of lien on the house. Generally, a lien that belonged to the seller must be paid off before you can buy, but there may be exceptions. Any kind of debt you’re assuming or any new debt you’re acquiring with the house will require that you sign for it. Make sure the amount, rate, and terms are what you expected. If they aren’t what you originally agreed to, don’t sign until you straighten out the issue. Once you sign, it’s yours, so you want to be sure on all the financials. Even if it delays closing, be sure to question anything you’re not clear on or that isn’t correct.
2). Do you need a termite letter?
The purchase a house comes with all types of responsibilities. One of those is making sure the home isn’t being eating by termites or other wood-destroying organisms. Your lender will want to be sure there are no termites because an infestation could put your home and the lender’s investment at risk. You may need a termite letter as part of your closing package. That states that a trained professional has examined the house, and that they have not found any termite damage or evidence of termites. If damage is found and repaired, you can also get a letter to that effect. The main purpose of the letter is to show the lender that there isn’t any active termite infestation at the time of closing. If there were termites before and treatment got rid of them, that’s generally acceptable.
3). Does your lender require proof of hazard insurance?
You need hazard insurance, also called homeowners insurance, if you’re going to use a mortgage to buy a home. While it’s always good to be insured, you won’t be required to if you paid cash for your house and don’t have a mortgage. Your lender will want to see proof of insurance because their investment is at risk if it’s not insured. Most lenders require you to sign a document that clearly states they have the right to purchase insurance for you and charge you for that insurance if you don’t keep the property insured on your own. In most cases, the insurance the lender buys will be much more expensive than anything you would get, so it’s always better to insure it yourself. Proof of insurance at the time of closing is generally required.
4). Has your lender indicated that open credit lines must be paid off?
Sometimes when you’re buying a home, it’s on a relatively tight debt-to-income ratio (DTI). If that’s true in your case, your lender may have requested that you pay off some of your debt to close the loan. Your lender will be specific about what must be paid off, and you’ll need proof of that. Working with your lender to be clear on what they will accept as proof is very important, since they could deny your loan if you don’t provide what they’re requesting. Not every loan will have this stipulation, but offering to pay down a certain amount of debt can be one way to help you qualify for a loan. Just make sure you know what you need to show at closing, so you come prepared to move through the process. A delayed closing can get expensive, and could even cost you the house.
5). Have you gotten a cashier’s check?
As the buyer, you’re going to have to pay some closing costs and put money down on your home. Even if the seller is paying most of your closing and you have a USDA loan or other type that you can get with no money down, there will still be small amounts that you’ll need to pay. The title company will tell you exactly how much money you must bring to closing. You can’t just show up with cash or a personal check, though. You have to pay with a cashier’s check. Make sure you ask who it’s made out to, so you can have your bank print it correctly. If it’s wrong, it could delay your closing, leading to frustration for you and for the seller.
You’ll sign the mortgage and deed, along with forms for your identity and tax information. Different states have their own requirements as to what else must be signed, as well. Feel free to ask questions at closing if you’re not sure about a form or a particular piece of information. It’s your closing, and you want to be sure you understand it clearly.
2 Point Highlight
When you’re about to get to the closing table and sign the documents on your house, there will be plenty of papers you’ll need to consider.
Your lender will want to see proof of insurance because their investment is at risk if it’s not insured.
