The Three Most Important Closing Documents

When you went to your closing, you were most likely lead [steered] to “sign here and here, initial here, initial here, sign here, we are almost finished…” Without really knowing what the documents meant, except it’s required by RESPA.

If the closer would have been educated, they should have stated and showed you the three (yes only three) most important documents in that stack of “RESPAs”:

1.  Your HUD. HUD stands for Department of Housing and Urban Development. What the HUD shows us is the breakdown of the money spent by you, to acquire your loan.

2.  The NOTE. The Note, will show you the amount you pay each month, who you pay, the Rate & Terms (length of mortgage), whether or not this loan will be an ARM, Fixed or Balloon Mortgage, if there is a Prepayment Penalty, and when the NOTE will “mature to adjust” or if it is a Fixed Rate Mortgage.

and

3.  Your Mortgage. The Mortgage gives the legal perimeters of the loan guidelines, conditions and stipulations, it will also show the amount that [should be the amount] you borrowed, your Lenders Servicing Agreement. The servicing agreement will let you know if this lender, that you are closing with, will remain your lender.

Would the outcome of your closing have been different, if you would have had the Negative Amortization or Blended Rate explained?

That is a true “what if” in hindsight!

25 Responses to “The Three Most Important Closing Documents”

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