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When you first enter into the market for a house, you may have an idea of what you are looking for, but most people will find that they never really know exactly what they are going to get. The weird thing about house shopping is that when you find the house that is right for you, you know it almost right away. Now is when the paperwork really starts to pile up. Buying a new house generates a lot of paper, and it is in the buyer's best interest to know which documents they should keep. A lot of the time, the documents are made out in triplicate so that there is a copy available for all parties, including the buyer, the seller, and the legal representatives of both. For your part, after closing the deal on the new house, make sure that you keep the following documents in a safe location (the best place is probably in a safe deposit box in the bank).
Insurance Documents: You won't be able to purchase a home until you have taken out an insurance policy on it, so make sure to shop around for the plan that best fits you. Most companies will have lengthy packages detailing what is covered, in what event they are covered, and how much coverage you have (as well as the deductible amounts). This plan can be set up on a monthly payment basis, or can be paid for as part of the settlement on the home. The information will be handy in case of an emergency and also when it is time to renew the following year. Most mortgages will come with some kind of insurance as well, so make sure you have these too.
HUD-1 Settlement Statement: This document is similar to any good faith statements that you may have signed with the seller during the selling process, but is an official record of any agreements that have passed between the buyer and the seller. It keeps track of all the settlement costs. This is a handy reference, and is also necessary in the event that you sell the home again for tax purposes.
Deed: This document lists you as the official owner of the house and the property on which it stands.
Riders and Amendments: A lot of homes have additional rules that are not necessarily in city by-laws but which are adhered to by all residents of a neighborhood. Some communities have specific prohibitions against certain improvements or rules regulating what can or cannot be included in the home. Keeping these records close is a helpful reminder. As well, many condos and townhouse types have associations that have their own rules and standards.
Mortgage Note and Deed: These notes detail the financial terms agreed upon by the lender and the home owner. The note details the financial and repayment terms that the home owner has agreed to, while the deed gives the lender a claim against the home in the event the buyer does not meet the terms of the mortgage note.
There will be a lot of paper involved in these documents, so make sure that you have adequate space for their storage. Again, it is best to keep these documents outside of your house in a secure location accessible only by you.
GBrey | 