When you close on a home purchase, you’re responsible for sitting down and signing official documents. There are usually several documents, some of which relate to you taking ownership over the home and some of which outline your home mortgage responsibilities. With so many pages of official documents, you may wonder which ones you should keep after the closing and which ones aren’t as important.
The papers you sign at your closing are legally binding documents that provide you with important information about your responsibilities. It’s crucial that you keep many of these documents so you can review the agreements you made and refresh your memory on the lender’s responsibilities. Learning which documents are important to keep for future reference will ensure you maintain a completed file to review whenever you need.
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What Documents Should I Keep?
Many of the documents you’re required to sign at closing help protect your lender and ensure your responsibilities are clearly communicated. There are several important documents relating to the transfer of ownership and agreements you made with the seller, insurance company, and lender.
Preliminary documents refer to the documents you were required to sign while negotiating terms with the seller and other parties involved in the transaction. You may have signed a buyer’s agent agreement that outlines the working relationship you have with your agent, including your expectations and responsibilities.
When you put an offer in on the home, you signed a purchase agreement or contract. This preliminary document provides information on what you offered for the home, including the purchase price and any repairs you requested to be made or other stipulations of the sale. To successfully close on the home, both parties must adhere to the terms outlined in the purchase agreement.
Documents on the Way to Closing
Throughout the negotiation process, you and the seller may have signed additional documents to hash out the details of your agreement. After you conducted a home inspection, you may have found additional repairs that need to be addressed before you take over ownership of the home.
These negotiations and stipulations are outlined in contract addendums, amendments, or riders, which alter the terms of the original contract. Not only can these documents outline changes to the actual contract, they may also be executed to correct information on the contract, such as the spelling of names or the address of the property.
Seller’s disclosures are additional documents you may be provided with before you close on the home. These documents provide information that the seller must legally disclose, such as as if the home has lead paint or a guarantee that the home has no structural defects.
There are several closing documents you’ll need to sign to successfully transfer ownership of the property. You may be asked to sign escrow instructions, which give the title or escrow agent permission to move money around on your behalf, allowing the contract to be executed.
Your home inspection will also be presented before you close on the property. This document is important because it outlines what needs to be fixed in the home. You may be able to use this home inspection as a bargaining tool when negotiating the price or other sale terms.
At closing, you’ll also sign financing documents, which outline the closing costs and other fees you or the seller are responsible for paying. If you qualified for a first-time home buyer financing program, you’ll be required to sign documents relating to financial assistance you’ll receive. Your lender requires your signature on several documents to ensure you understand the loan terms.
The home deed or home title is usually mailed to you after the closing is complete. The house deed is an original document and you’re the only party involved in the transaction who will receive it so it’s important to keep it in a safe place.
Whether you’re investing in real estate or you’re planning to buy your forever home, your lender requires you to obtain adequate insurance to cover your purchase. You may be required to provide proof that you’ve purchased homeowner’s insurance when you close on the home. Your policy documents include information on the coverage you purchased and your policy term.
You’ll also be provided with a title insurance policy at closing. This document outlines your financial responsibility for title insurance and any gaps in coverage. It ensures there are no title issues and you can take full ownership of the property.
Where Can I Get a Copy of My Closing Documents?
After closing, you’ll receive a certified copy of your closing documents from the closing agent. If you need additional copies of these documents, you can contact the closing agent to ask for them. In some cases, you may also be provided with an electronic file that stores your documents so you can access them electronically at any time.
You should keep the original closing statement that was provided to you. When your original house deed is sent to you by mail, be sure to hold onto it as well. Attempt to keep all original documents provided at closing but you can also store copies of other documents if you misplace the originals.
Why You Should Keep Closing Documents
It’s important to hold on to these documents after closing so you can review them as needed. You also need to keep your closing documents because:
- You may need to resolve a future title issue.
- The seller might not have completed home repairs outlined in the contract.
- You may need to reference your loan documents to review your interest rate or loan term.
- You might want to review your home inspection to see what repairs need to be made.
- You may need to review your homeowner’s insurance policy for coverage information.
- You might need to present these documents in a court of law if you pursue legal action against a party involved in the transaction.
It’s important to store the documents you signed pertaining to your home purchase in a secure location years after your closing date. These documents provide pertinent information pertaining to your transfer of ownership, the loan you agreed to, and the insurance coverage you carry on your home.
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