Closing is the eagerly anticipated culmination of the real estate transaction. The parties convene at the law firm or title company office to execute all required documents. The buyer and seller, if applicable, remit any funds due, and the attorney or settlement agent disburses funds as set out on the HUD-1 Settlement Statement. Following is a list of the documents that a buyer signs at a typical closing where the buyer obtains a loan:
HUD-1 Settlement Statement:
sets out all receipts and disbursements made by, on behalf of, or to the buyer and seller in the transaction.
outlines the material terms of the loan including interest rate, term, maturity date, principal and interest payment amount, late penalty and prepayment penalty.
(a/k/a Security Deed, Deed to Secure Debt, Deed of Trust, Trust Deed, depending on the state in which the property is located) - secures the property as collateral for the loan.
Where applicable, buyer executes sworn statements relating to:
owner-occupancy of the property;
employment and income;
variations or "aliases";
non-existence of secondary financing;
and accuracy of all information supplied to the lender;
matters specific to the particular transaction.
Disclosures and Acknowledgements:
Where applicable, borrower may sign the following disclosures and acknowledgements:
that a default in payment of the loan could result in a foreclosure;
that the closing attorney/settlement agent represents the
of the Annual Percentage Rate ("APR") as reflected on the
Truth In Lending Disclosure or "TIL";
of projected escrow account activity for one year;
that property is or is not located within a flood zone;
of receipt and review of survey;
of information relating to lender's history
of transferring/selling loans.
- standard form which reflects the income, assets,
debts and other pertinent information used to qualify borrower
for the loan.
- verifies the borrower's social security number
for the reporting of payment of
interest to the IRS.
forms 4506 and/or 8821
- authorizes the lender
to obtain information from the IRS to verify information on
- shows total payment amount, date of first
payment and information regarding where to remit payment.