The most fundamental real estate transaction is a “cash closing.” This type of transaction can be consummated by executing a handful of documents such as a Settlement Statement, Seller’s and Purchaser’s Affidavits, and Transfer Tax Form. However, a transaction involving a mortgage loan can require execution of (50) fifty or more documents. Some of these will be prepared by the closing attorney’s office, but most will be prepared by the Lender. The documents furnished by the Lender will include Federal and State forms as well as a host of others ranging from various affidavits to taxes. For a complete overview of the Process and Workflow Click Here. The following is a list of typical documents found in a loan closing package. This list is not conclusive as each loan is unique and may vary somewhat according to the type of loan. We have included samples of the most important documents. These are Sample Documents and are made for illustration purposes only. For a complete listing please visit our Sample Documents Page.

You will need Adobe Acrobat Reader to view these articles. If you do not have Adobe Acrobat Reader, click on their graphic for free download.

 

HUD-1 Settlement Statement: Sample

Developed by the U.S. Department of Housing and Urban Development, this document itemizes the services provided, and fees and charges associated with closing the mortgage loan.

GRMA Disclosure

Required by the State of Georgia as a disclosure to the Borrower(s) that failure to comply with terms and conditions of the loan could result in foreclosure against the subject property.

Representation Disclosure

Informs the Borrower(s) that the Closing Attorney’s Office represents the Lender/Investor and not the Purchaser or Seller.

Truth-In-Lending Disclosure: Sample Also, please see the Truth-In-Lending Explanation.

Discloses the “annual percentage rate” (APR) reflecting the cost of the mortgage loan as a yearly rate. This rate will probably be higher than the rate stated on the Note because the APR includes, in addition to interest, loan discount points, fees, and other credit costs. Additional information is also provided, such as finance charges, schedule of payments, late payment charges, and whether or not there is a prepayment penalty.

Promissory Note: Sample

The instrument the Borrower(s) sign which contains an unconditional promise to pay, on demand or at a fixed or determined future time, a particular sum of money to the Lender, a specified person, or the bearer of the Promissory Note. This document will outline the basic terms of the loan including names of Borrower and Lender, Interest Rate, Loan Amount, and period of repayment.

Security Deed:

(With Appropriate Riders.) The instrument through which the Borrower(s) convey the subject property to the Lender as collateral (or security) for the mortgage loan. This document will outline the terms and conditions of the mortgage loan.

Riders

Attached to the Security Deed, in certain circumstances. For example: A Planned Unit Development Rider where the subject property is located in an area with covenants providing for mandatory assessments (e.g. Homeowner Association fees) or an Adjustable Rate Rider for Adjustable Rate mortgage loans.

Waiver of Borrower’s Right: Sample

Acknowledges the Borrower’s understanding that failure to meet the terms and conditions of the mortgage loan could result in foreclosure upon the collateral property and that this procedure is non-judicial in Georgia.

Survey/Termite Waivers or Hold Harmless Forms

These are included based on the requirements of the given transaction. In some instances, mostly Refinances and Second Mortgages, Surveys and Termite Inspections are not required and thereby “waived.” In cases where Surveys and Termite Inspections are required, the closing package will include a “hold harmless” agreement which serves as notice to the Borrower(s) that such services were provided by an independent contractor.

Escrow Account Statement

Federally required disclosure on every residential mortgage loan with escrow accounts for payment of future taxes and insurance, reflects anticipated receipt and disbursement of escrow funds over the next (12) twelve months.

IRS Form W-9

Used by the Lender as verification of Borrower’s Social Security Number and for reporting interest deduction by the Lender to the IRS.

IRS Forms 4506/8821

Authorizes the Lender to request a copy of Borrower(s) income tax return directly from the IRS.

Occupancy/Employment Affidavits

Certify that the Borrower(s) intend to occupy the subject property as a principal residence and that employment status has not changed since loan application.

Flood Insurance

The Flood Protection Act of 1973 (Public Law 93-234) requires the purchase of flood insurance in certain flood prone areas as designated by the Department of Housing and Urban Development. Accordingly, Borrower(s) must purchase such insurance if the property is located in an area where flood insurance is required.

Corrections/Errors and Omissions/Compliance Agreement

Borrower’s Agreement to cooperate with Lender and Settlement Agent in correcting typographical or clerical errors in any mortgage documents.

Borrower’s Certification and Authorization

Borrower’s certification that all information provided to the Lender in association with the mortgage loan was true and correct and authorizing Lender to re-verify credit information.

First Payment/Coupon Letter

Most Lenders provide a temporary coupon for the Borrower(s) to make their initial mortgage payment in case the coupon payment booklet is not received in time for such payment.

Notice of Right of Rescission

Used in case of Refinance and Second Mortgages, not when property is subject of a sale. Gives the Borrower(s) the right under Federal Law to cancel the transaction, without cost, within three business days.

The Remainder of Documents Pertain to Seller

Seller’s Affidavit of Residence

Verifies the Seller(s) is not subject to State of Georgia Capital Gains Tax withholding requirements.

Seller’s Certificate of Exemption

Used in conjunction with above affidavit if Seller is not a resident of the State of Georgia. Verifies Seller’s exemption from State of Georgia Capital Gains Tax withholding.

Warranty Deed:

Instrument conveying title to real property from Seller(s) to Purchaser(s).

Owner’s Affidavit

Affidavit of Seller(s) certifying that the property is conveyed “free and clear” of any liens, claims or judgments.