A Few Major Documents You Have to Sign For Mortgage
The mortgage process requires you to sign a few key documents as per the law. The goal is to protect your interests as a home buyer as well as the lender’s interests, and make the process of financing your home as transparent as possible. Here is a brief description of the four vital documents you must sign:
The Loan Estimate is the first document you will receive within 3 days after you submit the mortgage application. This document is a 3-page form that will describe your loan terms, your monthly payments that you will make over the life of your loan (it includes insurance and taxes), and the closing cost details.
You will receive this form within 3 days of your mortgage closing. It appears similar to the Loan Estimate form, but it will provide the break-up of the costs that you have paid versus the seller and the third parties. If you decide to go ahead with the closing, you will be required to sign other loan documents.
This document is your formal mortgage contract. When you sign this document, you are promising to repay a specific amount with interest at a specific rate for a specific time period to your lender in order to become the owner of the home. In the Promissory Note, you will legally agree that your home is securitized against the loan. This is a protection for the lender in case you default on your loan repayment.
Mortgage or Deed of Trust
You will be required to sign either of these forms, depending on the applicable state law. This document will pledge your home as a security for the Promissory Note. Deed of Trust or Mortgage also includes an occupancy provision, which you will be required to comply with. It is critical to carefully read and understand your loan documents before you sign any of them.