Why So Much Paperwork?
Clients ask that a lot! I get it. There are a lot of documents that need to be signed from the moment you apply for a loan, until the day you are getting the keys to your dream home—you will be reviewing, reading and hopefully—understanding a lot of paperwork. All legal documents, some need more explaining than others. Having a qualified Closing Attorney on your side throughout this process, as your ally, is the key.
Over the last fifteen years the amount of paperwork that borrowers have to sign has greatly increased, and that is in direct relation to the way that the laws in this area have evolved.
To give you a little background, Congress enacted RESPA, it is an Act that was designed to protect borrower consumers. In the 1970s there were like 30 pieces of paper that needed to be signed at a closing, now we have close to 100 or more depending upon the nature of the transaction. Seems like a pain in the neck, but the Act was passed to help protect borrowers.
One of the most important documents you will sign at closing is called a Closing Disclosure. You will know well in advance what most of your closing costs will be.
This document provides a summary of the borrower’s transactions, including the gross amount due from the borrower, cash at settlement due, and more; a summary of seller’s transactions, including gross amount of money due to the seller; a summary of total real estate broker fees; items payable in connection with the loan; items required by lender to be paid in advance; title charges; any additional settlement charges; the terms of the loan, including loan interest rate and whether or not the rate is adjustable; and more. The new RESPA laws also stipulate that most closing costs must be within 10 percent tolerance of your lender’s good faith estimate (GFE). This means that when you close, the total cost cannot exceed more than 10 percent of the original amount in your GFE.
RESPA laws are designed to help homebuyers determine if their closing costs are within tolerance requirements. The laws also require that you receive disclosure throughout the home buying and loan process, and prohibits kickbacks that increase a settlement amount. Your closing attorney will help to make sure that your rights under RESPA are protected and that the closing process is handled as efficiently as possible.
Massachusetts Law requires that all lenders be represented by a Closing Attorney. Most of the time, a buyer will elect to also use the Closing Attorney to represent them in the transaction, namely to hire them to review their P&S (purchase and sale agreement). This is usually the most efficient approach.
Meet with a Massachusetts Closing Attorney Today
Contact out office today to see how we can help you. Call 978-539-7500. We make the buying process simple at Simple Title.