What Should I Expect to Sign?


In addition to the HUD-1 (see the explanation of the HUD-1 on page 6), there will he a number of documents that you are required to sign at closing. Below is a brief explanation of some of the most common documents:
Promissory Note: Frequently referred to as an “IOU”, it is a written promise to pay a specified amount of money to the holder of the Note, at a certain time and under certain terms.
Deed of Trust: An instrument used in Virginia in place of a mortgage. This is usually a standardized legal document recorded in the appropriate government land records that formally conveys ownership of prop­erty from the Buyer to a Trustee for the purpose of Securing payment of the loan. If the loan is not repaid, the Trustee is empowered to sell the property at auc­tion and use the sale proceeds to pay off the loan.
First Payment Letter: This document sets forth the amount of your total monthly mortgage payment and the first doe dare. Typically, it describes the amount of principal, interest, and monthly escrow deposits for real estate taxes, homeowners' insurance and/or mortgage insurance, if you have established an escrow account. This payment amount does not include your Home Owners' Association or Condominium Association dues.
Truth in Lending Statement: This form, required by federal law, shows the Annual Percentage Rate (APR), the payment breakdown and the total cost over the life of the loan. It also confirms general terms of the loan such as whether the interest rate is variable and whether there is a prepayment penalty and confirms that the subject property is securing the loan.

W-9: This document ensures that your mortgage interest payments are correctly linked to your Social Security Number when reported to the IRS.

Flood Insurance: Lenders are required under federal law to determine whether your property is located in a special flood hazard zone, as determined by FEMA. If it is, you will be required to obtain flood insurance. If your property is not in a special flood hazard zone, you will not be required to get flood insurance. Remember, if FEMA later determines that your property is in as special flood hazard zone, you may be required to obtain flood insurance at that time.
Signature/Name Affidavit: A written declaration swearing under oath that you are the same person as the person listed in the document and confirming variations of your name.
Termite Report: A report issued by a licensed pest control firm no more than 30 days prior to settlement stating whether there was any visible evidence of wood destroying insects found at the property.
Survey: Surveys are usually one page drawings mapping the approximate location of boundaries and physical improvements found at the property. Surveys are rou­tinely required to ascertain whether others (such as adjoining property owners) have encroached on the property being purchased. Surveys also illustrate if the physical improvements to the subject property (1) extend beyond the lot's legal boundaries or (2) violate building restriction lines and other regulatory restric­tions, or (.3) are located in easements of record. The most common type of survey required in a residential real estate transaction is a House Location Survey which shows the location of all improvements relative to the physically observed lot lines and easements of record. In this type of survey, no physical markers (such as corner posts, iron pipes, flags, stakes, monu­ments, etc.) are installed to aid in locating boundaries. However, any existing boundary markers will be noted on the survey. The installation of boundary markers requires additional time and expense. If you wish to have the boundaries and corners of your lot marked (i.e., a full Boundary Survey), please call a title company to discuss the matter.

 

**Source: Key Title