Closing Documents You Should Keep...






On closing day, expect to sign a lot of documents and walk away with a big stack of papers. Here’s a list of the most important documents you should file away for future reference.

HUD-1 settlement statement.

Itemizes all the costs — commissions, loan fees, points, and hazard insurance —associated with the closing. You’ll need it for income tax purposes if you paid points.

Truth in Lending statement.

Summarizes the terms of your mortgage loan, including the annual percentage rate and recision period.

Mortgage and note.

Spell out the legal terms of your mortgage obligation and the agreed-upon repayment terms.

Deed.

Transfers ownership to you.

Affidavits.

Binding statements by either party. For example, the sellers will often sign an affidavit stating that they haven’t incurred any liens.

Riders.

Amendments to the sales contract that affect your rights. Example: The sellers won’t move out until two weeks after closing but will pay rent to the buyers during that period.

Insurance policies.

Provide a record and proof of your coverage.

Sources: Credit Union National Association; Mortgage Bankers Association; Home-Buyer’s Guide (Real Estate Center at Texas A&M, 2000)


A Funny Look At A Real Estate Closing...

The Ritual Closing Ceremony

This is an important and highly traditional part of the home-buying process, the last major hurdle you must clear before you become an Official Homeowner.

It is comparable to the initiation ceremonies at major college fraternities, where, to prove that he is worthy of the privileges and responsibilities of membership, the pledge must perform some feat such as attending a Papal Mass wearing only a softball glove.

Essentially, what you must do, in the Ritual Closing Ceremony, is go into a small room and write large checks to total strangers. According to tradition, anybody, may ask you for a check, for any amount and you may not refuse.

Once you get started handing out money, the good news will travel quickly through the real estate community via joyful shout: "A Closing Ceremony is taking place!"

Soon there will be a huge horde of people - lawyers, bankers, brokers, insurance people, termite inspectors, caterers, photographers, people you used to know in high school- crowding into the closing room and spilling out into the street. You may be forced to hurl batches of signed blank checks out the window, just to make sure that everyone is accommodated in the traditional way.

Another ritual task you must perform during the Closing Ceremony is frown with feigned comprehension at various unintelligible documents that will be placed in front of you by random individuals wearing suits:

RANDOM INDIVIDUAL: Now, as you can see, this is the Declaration of your Net Interest Accrual Payments of Debenture.

YOU (frowning): Yes.

RANDOM INDIVIDUAL: And this is the Notification of your Pro Rata Indemnities of Assumption.

You: Certainly.

RANDOM INDIVIDUAL: And this is the digestive system of a badger.

You: Of course.

Once the various officials present are satisfied that you truly wish to become a homeowner and have no checks left, they will award you a mortgage, which will sell out your new duties and obligations in standard legal terminology.

From HOMES and Other Black Holes - The Happy Homeowner's Guide to Ritual Closing Ceremonies, Newton's First Law of Furniture Buying, The Lethal Chemicals Man, and Other Perils of the American Dream By Dave Barry