Understanding the homebuying and closing documents

You'll sign many important documents at closing, the final step in the homebuying process.

Understanding the purpose and function of the primary documents used during the homebuying process will help you navigate the process more confidently, from application through closing. Once all closing documents are signed, the property is legally transferred to you and you are given your keys to your new home!

Forms you’ll see prior to closing

Buyer Representative Agreement: When you engage a real estate agent to help you buy a home, they may ask you to sign a Buyer Representation Agreement – a legal document that formalizes your working relationship with your agent.

Uniform Residential Loan Application: This is your mortgage loan application the lender uses to obtain certain personal and financial information to determine whether you qualify for a mortgage. You’ll be required to provide information about your monthly income, household expenses, assets and liabilities, and personal information such as your social security number and marital status.

Loan Estimate: Within three business days after completing your loan application, your lender will give you a Loan Estimate that should reflect all the terms and associated costs with the loan you discussed. Consider exploring your loan options from several lenders and choose the loan that is best for you and your financial situation.

Purchase Agreement: Once your offer to purchase a home is accepted by the seller, a purchase agreement is drawn up which includes all details of the transaction, including the names of the buyers and sellers, total purchase price, commission payable to the real estate agent, and requested closing date. It is used to secure financing from the lender and is submitted as part of the closing paperwork.

The most important forms you'll sign at closing

Closing Disclosure: This form provides the actual fees, costs and credits associated with closing your loan. Your lender is required to provide you with the Closing Disclosure 3 business days before your scheduled closing, giving you time to review and ensure that the loan terms and costs closely align with those provided in your Loan Estimate.

The Promissory Note: This is the legal document you sign agreeing to repay the loan according to the terms to which you agreed. It outlines the details of the loan, the dates when payments are to be made and where payments are to be sent. It also explains what can happen if you fail to make a payment on time.

Deed of Trust: By signing this document, you are giving the lender the right to take back the property by foreclosure should you fail to repay your loan as agreed. This document also explains your rights and responsibilities as a borrower.

Deed: The seller will sign the deed to transfer ownership over to you, and it will have the names of all the buyers on it. Your title will be held with a third-party trustee until you have paid for the house in full. You will receive a copy of the deed at closing.

Affidavits and Declarations: These are statements declaring all the information you provide is true, including that the property will be your primary residence and all repairs needed on the property were made prior to closing.

Because these documents are legally-binding and will affect your finances going forward, be sure to ask for clarification if something doesn’t make sense. This is your right.