Once you have made the decision to buy one of those homes for sale in Oviedo, you will need to officially apply for a mortgage. If this is your first time, you may find yourself overwhelmed with the amount of paperwork you will be asked to complete.
Home buyers often feel like their heads are spinning as they start the process of buying homes for sale in Oviedo. The whirlwind of paperwork swirling all around them just to submit an official application is enough, but there also are a number of forms to be filled out and documents that must get signed to get the process moving in the right direction. Then, on the day of closing, there are three mortgage documents that must be approved and signed.
To understand exactly what must be signed to close on homes for sale in Oviedo, the following provides home buyers with a closer look at the three mortgage closing documents required for all home buys.
Promissory Note
The Promissory Note is the IOU for homes for sale in Oviedo. This is the promise the home buyer makes to the lender that they will indeed pay for the property. This document outlines the terms of the loan. It will include the payment intervals, the loan’s lifetime (15 years, 30 years) and the mortgage type (fixed, adjustable). The Promissory Note also covers whether or not a penalty will be levied if the loan gets paid off early.
The Promissory Note is the document that the lender will use to claim the property if the loan goes into default due to a lack of payment.
Deed of Trust
This document is an agreement that pledges the purchasing homes for sale in Oviedo as security for the promissory note. There are three occupancy provisions that can be selected and home buyers must comply with one of them based on the agreed upon the loan. These three occupancy provisions are:
- Non-owner occupied – These types of mortgages often require a higher interest rate. Typically, buyers can convert the property to an owner-occupied home or a second home whenever they choose.
- Owner occupied– As your main residence, it is required that buyers move into the home within 60 days of the closing date. Usually, buyers will be required to live on site for a minimum amount of time, which often is set at a one-year timeframe. After that, it may be used as a secondary home or rental property.
- Second home – If bought as a vacation home and listed as a secondary residence, then you are not allowed to rent the property out.
Settlement Statement or Closing Disclosure
This document contains a list of everything being paid for when it comes to homes for sale in Oviedo. This fee list should look familiar since it is required by law for mortgage lenders to provide a Loan Estimate early on in the loan process.
The line-item list will detail real estate agent fees, mortgage lender fees, title fees, prorated items, and HOA Fees.
It is best to be prepared on the day of closing by understanding exactly what it is you are signing. If you have any questions, try to get everything clarified before you close on homes for sale in Oviedo. This will help the process go through much more smoothly and quickly so you can start your new adventure in the Oviedo real estate market.
