Real Estate-Buyer Closing Documents

Documents Buyers Sign at Closing

The documents listed below are common closing documents when a lender is loaning money to the buyer for the purchase of real property.

• HUD-1 Settlement Statement: sets out the amount due from the borrower, the amount paid by or on behalf of the borrower, the gross amount due to the seller, and reductions in amount to the seller. The HUD-1 Settlement Statement also sets out on the second page the settlement charges to the buyer and seller and all receipts and disbursements in the transaction.
• Promissory Note: outlines the material terms of the loan including the loan amount, lender name, interest rate, term, maturity date, principal and interest payment amount, and late penalty.
• First Payment Letter: discloses principal and interest amounts, escrow amount (if any), total payment amount, date of first payment, and information regarding where to remit payment. This may also include a temporary payment coupon(s).
• Security Deed: Also known as a Mortgage that secures the property as collateral for the loan in the event of default.
• Security Deed Riders: where applicable, riders to the Security Deed may include a Planned Unit Development Rider (where real property is located in a subdivision with covenants), Interest Only Rider, and Adjustable Rate Rider.
• Waiver of Borrower's Rights: allows the lender to foreclose on real property in the event of default without having to sue the borrower first.
• Loan Application: standard form which reflects the income, assets, debts and other pertinent information used to qualify a borrower for the loan.
• Affidavits: where applicable, the buyer executes sworn statements under oath relating to occupancy of the property, verification of current employment and income, any name "aliases", the non-existence of secondary financing, truth and accuracy of all information supplied to the lender.
• Disclosures and Acknowledgements: where applicable, the borrower may sign disclosures and acknowledgements that a default in payment of the loan could result in a foreclosure, that the closing attorney represents the lender, acknowledgement of the Federal Truth-In-Lending Disclosure Statement that discloses the Annual Percentage Rate ("APR") and other information, acknowledgement of the Initial Escrow Account Disclosure Statement that shows projected escrow account activity for the next year, acknowledgement that the property is or is not located within a flood zone, acknowledgement of the insurance requirements for the real property, the disclosure of information relating to lender's history of transferring/selling loans, disclosure of Itemization of Amount Financed, notice of no oral agreements, acknowledgement to correct any documents that have errors, and notice of right to your appraisal.
• IRS Form W-9: verifies the borrower's social security number for the reporting of payment of interest to the IRS.
• IRS Forms 4506 and/or 8821: authorizes the lender to obtain information from the IRS to verify information on the application form.