All the Paperwork You May Sign When You Buy a Home

What You Sign When Closing on a Home If you have ever bought a home or know someone who has, you are familiar with the countless piles of paperwork. It seems never-ending, all the things you have to read to transfer ownership of the house and close on your mortgage loan.

Once you know what types of documents you will be expected to sign, you'll have a better understanding of what to look for.

However, each state is different when it comes to buying a home. Some paperwork and documents may be different depending on your state. Be sure and ask your real estate agent or attorney which form may apply to you.

A Deed

In most states, the deed to the home records ownership. The seller of a home transfers the deed to a buyer when they transfer ownership of the home.

A record of this transaction is usually sent to the county where the home is located so there is an open record of the legal ownership of the home.

A Bill of Sale

In many states, there is a Bill of Sale when the home is sold. While the Deed grants ownership of the home itself, the bill of sale indicates the ownership of all the equipment of the systems within the home. Most sellers leave the heating, air conditioning, light fixtures and security equipment intact when they move. They may also leave the stove, refrigerator, washer, dryer and other appliances in the home. The Bill of Sale confirms ownership of these items.

The Affidavit of Title

In some states, the buyer receives an Affidavit of Title. In some states this information might be included within the Title Policy. No one wants to buy a home that may some other invested interest in it. That is the purpose of an Affidavit of Title.

This document certifies that the property you are buying has no liens or leases on the home or land. If the seller has a mortgage or other liens on the property, they will usually be resolved prior to the transfer of the property.

Closing Disclosures

The Closing Disclosure is a federally-mandated document that details the costs of your mortgage before you accept it. This form is intended to go along with the costs outlined in the Loan Estimate which you should have received when you applied for the loan. Be sure that you understand every charge on this document, because you will be held accountable for all costs.

Initial Escrow Statement

Often times, when there is a sale of a home with a mortgage, the buyer will receive an Initial Escrow Statement. The purchase of home by a buyer will usually obligate property tax responsibilities as the new owner. The statement indicates how your lender may manage your property tax payments through escrow and detail those fees.

The Mortgage

In most states, a buyer will sign or receive a mortgage to the home. When a buyer signs the mortgage, they agree to pay back the money loaned to buy the home. The mortgage is secured by the home. Some buyers may have a primary and a secondary mortgage used to buy the home. These mortgages act as a lien on the property. This means that the lender who holds the mortgage can foreclose on the property and sell it if you do not make the required payments on time.

A Promissory Note

The mortgage lender may also have a home buyer sign a Promissory Note. The Promissory Note specifies the amount the of money borrowed, the interest rate and the term (length) of the loan. Sometimes, the lender may sell the loan to another lender or a government organization like Fannie Mae or Freddie Mac. When the lender sells the loan, the Promissory Note you signed transfers to the new creditor. You should be notified should your note be sold, though the terms of the note should not change.

In addition to the above more common forms, there may be other local and state forms that you may also have to complete and sign before you can claim ownership of your new home. However, knowing what to expect with these documents can help you avoid confusion and stress during the home buying process.

Dylan Snyder is a seasoned real estate professional serving the Jupiter real estate market, Palm Beach real estate market, Palm Beach Gardens real estate market, North Palm Beach real estate market, and the surrouding Palm Beach County area. Along with being a top producer in Jupiter real estate, Dylan's professionalism and expertise in luxury and waterfront real estate sets him and his team of real estate experts apart from the competition. For more information on Jupiter and Palm Beach real estate for sale, contact Dylan at (561) 951-9301.

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