Something that comes with buying a new house is dealing with the paperwork involved. Mortgages have always evoked images of stacks of papers to be signed, initialed, and dated, and most people don't take the time to read these. However, that can lead to serious mistakes if buyers are not careful.
Mortgage documents can be broken down into categories that are easier to understand.
The first category contains educational documents. These documents help educate the buyer about the process, and with access to them days or weeks before closing, buyers have plenty of time to read them. These documents include a closing affidavit that states the buyer's intentions,
- the financial information,
- the condition of the property, and other information, including
- the notice of right to cancel, the ARM disclosure (if it is not a fixed-rate mortgage), and
- the amortization schedule are also included in this paperwork.
Documents for future use
The other type of document is for future use. These documents outline the borrower's responsibilities once the purchase is complete. They include
- information about the date and amount of the first payment due,
- information about the escrow account if there is one, and
- information about property taxes and homeowner's insurance.
Many other pieces of information are included in these, so homeowners are encouraged to put them somewhere safe where they can be referred to as needed in the future.
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