What documents do buyers sign?

About:  They are regulated by state and/or federal governments:  They are not negotiable and you cannot make any changes to them.  You have to sign them exactly as they are, and you have to sing all of them if you want the loan.  There are only 6 things that differ from your loan and everyone else’s loans in Kentucky: Names, dates, dollar amounts, interest rates, property address and the length of your loan.  That’s it.  Everything else is boiler plate and identical all across Kentucky.  On conforming loans, the type most borrowers get, 98% of the docs are the same all across the U.S.  In these documents you are usually either a) agreeing to something; b) swearing that something is true, or c) acknowledging receipt of the document and/or that you understand the document. The lender has to have you sign many of these documents to be able to legally go after you in the event that you have (or will) commit mortgage fraud that causes them a financial loss.

Buyers’ closing documents consist of:
1. Closing Disclosure and Settlement Statement – These summarize the transaction – they show who’s paying what and who’s receiving what.  These documents combined, are the key to the transaction, and are therefore usually reviewed first.  They show all the fees, payments, prices, concessions, deposits, taxes, rents, HOA dues, etc….and they show who is paying and who is receiving each of them.  Lastly, these 2 documents show your bottom line…the total amount you will be paying/receiving at the closing.
2. Deed – the document that transfers ownership of the property.  This is also referred to as the title.
3. The title company’s documents. Some are required by law, some are required by the title company.
Most common examples:
a) Privacy policy – says the title co. does;t share/sell any of your non-public financial information they may receive.
b) Document correction agreement AND its’ limited power of attorney- says you’ll help fix any typo errors in the docs. Cannot change any items material to the transaction – like rate, payment, loan about, etc. The POA states the title co. may make changes if non-material to the transaction.  Any changed doc must be mailed to all parties. Note – If you get a conventional loan to buy a property, you will always sign these in the U.S., regardless of the lender.
c) List of services provided – defines what work/services the title co. performs/provides.
d) Proration agreement – shares the tax/HOA amounts that the prorations that are on the settlement statement are based upon, and that all parties agree these prorations are acceptable and final.
f) Notice the owners title insurance is available to you, and what 5 scenarios in which is is strongly recommended.  See article on Owners Title Insurance on this site.
 4. Loan documents
a) First payment letter – show payment breakdown and first payment’s due date.
b) Promissory Note – says you promise to pay the lender back the amount that you’re borrowing – shows interest rate, 1st and last payment dates.
c) Mortgage – Says if you don’t pay, you don’t stay – gives the lender the right to repossess your house if you default on your loan.
d) The rest of the documents. Includes document correction agreement and its limited power of attorney, same-name affidavit, etc.