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Make Your Move 15

Make Your Move 15

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Published by Bill Taylor

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Categories:Types, Business/Law
Published by: Bill Taylor on Mar 25, 2011
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03/25/2011

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KASLWESTON COUNTY EXTENSION REPORTBILL TAYLOR5/3/11
MAKE YOUR MOVE(Part 15)
We have been working our way through the process of purchasing a home. Last time we talkedabout closing costs and fees that will be due at the closing of the transaction. Closing feesusually run at least 3% of the borrowed amount, which means they could be $3000 or more onevery $100,000 borrowed.Now, lets review the documents you will be asked to sign to finalize the transaction. Of course,this is a general list and the exact forms and their contents may vary. You have the right to, andshould, request copies of all the closing documents prior to closing day, so that you can readthem and make note of any questions that you have. If there is anything you dont understand,be sure to consult with your attorney or lender for clarification.
Do
not 
sign any legal documentwithout reading and understanding it first!
 
The HUD Settlement Statement
 lists all of the charges and credits relating to the transactionfor both the buyer and seller. The closer will review the document and then ask you to sign it,acknowledging that it is correct. Both the seller and buyer must sign. Resolve anydisagreements
before
you sign it.
 
The Promissory Note
 this is the legal document that states how much you are borrowing andunder what terms. It will show the interest rate, the length or term, the date payments startand end, where the payments are to go, and how much the principal and interest paymentsare. It will list actions considered to be violations and the penalties for such actions. The lendercould require full payment of the loan for a violation. Some promissory notes may list a penaltyfor pre-payment of the loan and you should be aware of that time frame and the amount of thepenalty.
The Mortgage
 the legal document pledging the property as collateral on the loan. It stateswhen the lender can repossess, or foreclose, on the property. If the lender must repossess andresell a property to cover their loss, the original borrower may still be liable for any amount duethat is not covered by the property resale.
Truth-in-Lending Disclosure
 this is the document that discloses the full cost, terms, andconditions of the loan. It will show the Annual Percentage Rate or APR and any other fees. TheAPR is the true annual cost of the loan, including the interest and any upfront costs paid atclosing. This amount allows you to compare the cost of one loan to another.
The Deed
 the legal document that conveys, or transfers, ownership from one party toanother. It will show the full legal description of the property, the name(s) of the seller(s) andthe name(s) of the buyer(s). The deed is usually drawn up, notarized and delivered to theclosing by the seller.
 
 
Disclosures
 these will be most of the remaining documents for signature and they disclose toyou certain information regarding your loan and your rights. These are required bygovernmental and bank regulations, and, by signing the documents, you attest that you havereceived and understand the information.
Affidavits
 an affidavit is a written statement acknowledging that the information provided inthe affidavit is true to the best of your knowledge. Some loans may require affidavits aboutyour income, intentions to occupy the property, that there are no side agreements with othersin the transaction, etc.
You are committing fraud if you provide false information to the lender verbally or on anydocument. The lender could call your loan due and bring criminal charges against you if theyhave evidence that you have committed fraud.
After you have signed all of the closing documents, the closer should provide you with apackage containing a copy of every document you signed. Keep these documents in a water-and fire-proof safe place, such as a safe deposit box. You may need these documents for tax orlegal purposes, or to sell the home in the future. Replacing a lost or damaged title abstractcould be very costly.Bill TaylorWeston County Extension Office

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