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Mortgages

What papers should I get at or before a mortgage loan closing?

You can expect to find various types of documents:

  1. Federally-mandated documents and contractual documents
    These key documents inform you of the key terms, provisions, and costs of your loan. They outline your key rights and responsibilities as a borrower, and record the transaction between you and your lender.

    Federally-mandated documents include:
    • The HUD-1 Settlement Statement should show all of the costs of your loan, as well as who will be receiving payments from the loan. You will receive the HUD-1 at closing, but you have the right to request and the lender must provide it at least one day prior to closing.
    • The Truth-in-Lending (TIL) Disclosure lists costs of your mortgage such as how much you pay over the full term of the loan, what your mortgage payment will be initially, and the maximum payment under your loan. If your annual percentage rate (APR) changes enough to exceed regulatory requirements, the lender must give you a corrected final Truth-in-Lending disclosure.
    • The Notice of the Right to Rescind (if it is a refinance or home equity line of credit) makes you aware that if you are refinancing a loan, you have three business days from the lenders’ fulfillment of certain conditions to cancel your loan.

      Tip: Please note that if the lender fails to give you two copies of the right to rescind or the Truth-in-Lending Disclosure, you continue to have the right to cancel the loan for up to three years.

    • The Initial Escrow Statement lists the estimated taxes, insurance premiums and other charges the lender anticipates paying from your escrow account during the first year of your loan.

    Contractual documents include:
    • A promissory note describes what you are agreeing to.  It provides you with details regarding your loan,  including:
      • The amount you owe
      • The interest rate of the mortgage loan
      • The dates when the payments are to be made
      • The total amount you will pay
      • The length of time for repayment
      • Whether and how the payment amounts can change
      • The place where the payments are to be sent
    • A security instrument or Deed of Trust restates the basic information included in the Promissory Note, as well as explains your responsibilities and rights as a borrower, particularly that your house can be taken away by the bank if you fail to make agreed upon payments.
  2. State/local government-mandated documents: These are documents that fulfill state and local government requirements, generally for the purpose of collecting information and/or protecting the consumer (e.g., Septic System Disclosure, Massachusetts)
  3. Lender documents: These are documents added by the lender (e.g. Occupancy Affidavit)

Tip:Take some time to review each document as you receive it. If you have questions, ask for an explanation from your lender or broker.

Tip: At the closing, make sure to get a complete copy of the closing documents that you have signed, including your promissory note. Keep these documents for your records.

Tip: If you have a problem with your mortgage closing process, you should discuss the issue or matter with your lender. If you’re having issues with your mortgage, you can also submit a complaint  to the CFPB online or by calling (855) 411-CFPB (2372). We’ll forward your complaint to the company and work to get you a response. You may also wish to get your own attorney to take a look at your issue or matter.

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