A Guide to Buyer Closing Documents When Purchasing a Home

Buyer closing documents can be overwhelming, but staying organized can reduce your stress levels and help you avoid mistakes.

Key takeaways:

  • Buying a home can be stressful, because there’s a lot of documentation to cover.
  • Mistakes can happen if you don’t know what you’re doing.
  • Using an attorney to assist can make your life far easier.

Buying a home is exciting, but it also comes with its fair share of stress. The closing process is particularly challenging because you’ll receive a significant number of buyer closing documents that you’ll have to read, sign, and try to understand before finalizing the agreement.

Purchasing property is especially stressful for first-time buyers because they’ve never been through the situation before and don’t know what to expect. Fortunately, nearly every home purchase requires the same documentation, so you can read up on what will be expected of you before initiating the purchase. The result is a smoother process that doesn’t leave you feeling swamped.

Here’s a look at some buyer closing documents you’ll have to address before purchasing a house.

  • Closing disclosure – The home-buying process will always include a closing disclosure, which outlines the terms of your loan. This document isn’t a contract you’ll have to sign, but rather information from your lender for you to review. Your lender must supply you with your closing disclosure at least three business days before the deal closes. Vital information you’ll want to confirm through this document includes:
    • Your loan’s interest rate
    • Annual percentage rate
    • Projected monthly payments
    • Any closing costs you’re responsible for paying

It’s your responsibility to review and understand the closing disclosure, so take your time and go over this document thoroughly before the deal finalizes.

  • Proof of insurance – Your lender will want to see proof of homeowner’s insurance before allowing you to close on the property. This document proves that you’ve purchased insurance for the house, protecting the lender’s investment if something should happen. Ensure you’re on top of these documents in the days leading up to the closing because the entire thing could fall apart if you can’t show proof of insurance paperwork to the lender.
  • Loan application – You will have filled out a loan application when you first applied for your mortgage. A new copy of this document will show up for you to review before you close, and you’ll have to check the information to confirm its accuracy. If your financial situation has changed since you filled out your loan application, you’ll have to notify your lender to ensure you remain eligible for the mortgage.
  • Promissory Note – One of the most important documents you’ll receive during this process is the promissory note, as it legally binds you to repay the loan. This note will include information on: 
    • The total amount of your mortgage
    • Your interest rate
    • Your payment dates
    • The terms
    • Any penalties you can expect if you don’t make your payments 

A promissory note might also include details on how you’ll repay the lender and the payment method you’ll use.

  • Mortgage – You’ll want to pay close attention to the mortgage because it’s a legally binding document that puts your home up as collateral for your mortgage. Once you sign this document, your lender owns an interest in the property until you completely repay the loan. This stake allows the lender to foreclose or sell the property if you don’t make your payments. Make sure you understand the mortgage, because you don’t want to lose your home over a misunderstanding.
  • Title documents – You’ll receive a few title documents before closing, with the most notable being the title insurance commitment. This paperwork shows who owns the home and notifies you of any liens on the property. As you review this document, ensure the seller’s name is listed as the “party in title” and that the property doesn’t have any legal claims to unpaid debt. If you have any questions about liens on the property or who the actual owner is, getting a real estate attorney on the job is a good idea.
  • The deed – Finally, there’s the property deed which proves your ownership after closing. This contract will already be signed and notarized at closing, naming you as the buyer and new owner. If there are any property disputes in the future, they will likely be settled based on whose name is on the deed. Once the deed is signed, it goes to the county recorder, and a public record is created. 

Tips for streamlining the process

There’s a lot of documentation and information to review when buying a home, so it’s easy to see how it could become overwhelming. The good news is that most of this documentation is relatively standard, so all you’ll have to do is ensure the information you’ve provided on your buyer closing documents is accurate. You’ll want to set aside a few hours to review this information in full to guarantee there aren’t any surprises along the way. 

It’s also advisable to get professional assistance whenever you can to prevent mistakes. PeytonBolin offers buyer representation in Florida for real estate closing, for example, meaning you’ll have an attorney to guide you through your responsibilities at closing. Your attorney also acts as an additional set of eyes on your documents, helping you avoid errors. You can provide our team with a fully executed sales contract, too, and we’ll search the title so you can be sure there aren’t any liens and the seller truly owns the property. 

Contact PeytonBolin today to learn more about our buyer representation services in Florida.

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