Things You Should Get in Writing When Buying a HouseAdmin@ | May 24, 2019 | 0 | Real Estate
More often than not, the purchase of a home is so exciting, yet so overwhelming that you overlook many things you should get in writing whehn buying a house. There is much at stake for you and your family and mistakes can create unnecessary obligations, not to mention, its gives sellers an unfair advantage.
Oral promises are not legally binding, and therefore crucial you get certain documents signed. Here are 5 vital documents you should get in writing when buying a house;
- The Sale Agreement: The initial document of a home purchase, and probably the most important is your sale agreement that details the offer. This form really goes by several various names: Offer Form, Purchase/Sale Agreement, or Earnest Money Agreement. The seller or agent thereof will typically fill in the blanks that includes your offer price, your earnest money or down payment amount, any financing, the timelines for inspection and closing dates.
- The Promissory Note: This document is like an IOU and promise to pay your mortgage. Your signature represents your obligation to pay the lender, as agreed, according to the specified terms. This will include dates on which you must make your mortgage payments, who will service the mortgage, and will include an address where payments must be sent.
- Good Faith Estimate (or GFE): Your GFE document provides an estimate of a detailed breakdown of your loan cost. Your closing costs are comprised of many elements, including: points and origination fees, recording fees, the appraisal, notary fees, title insurance, HOA deposits, and any attorney fees, and more, depending on your loan program.
- Deed of Trust: A note itself is a fairly straightforward promise to pay, but to secure collateral for a note, your closing officer draws up a deed of trust, also called a mortgage deed, depending on the state you live in. This deed of trust describes the property against which the loan is written and enables the lender to foreclose on the property if you don’t pay. The document guarantees security for repayment of your home loan to the lender.
- HUD-1 Settlement Statement: The HUD-1 form and RESPA are frequently used interchangeably. RESPA is the Real Estate Settlement Procedures Act, passed in 1974 to control real estate settlement costs; the form must be given to the buyer within three days of the loan application, but everyone involved in a property transaction — the buyer, seller, and lender receives the HUD-1 settlement form. You will be asked to sign this document, which itemizes the services provided and lists the charges and fees for both the buyer and seller.
Before You Sign
Signing your paperwork is the final step in the process of purchasing or selling your property, and instructions can differ greatly from transaction to transaction, but whatever they look like, you’ll get to the same result.
Make sure before you sign on the dotted line, you review and fully comprehend the documents, and if you’re unsure, never hesitate to get professional assistance.
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