What paperwork you need to do while purchasing a property

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By: tiarajoseph11
on 3rd Oct,2013

You also have to sign a number of documents while purchasing a property.
What paperwork you need to do while purchasing a property

Buying a home is a huge financial investment and it involves a lot of paperwork. You need to have required knowledge regarding these documents so that you can gather these documents beforehand and provide all of them when required. You also have to sign a number of documents while purchasing a property. Go through this article to gather knowledge about the required documentation while buying a new home. 
Documents you need to take out a mortgage loan
You need to produce certain documents while applying for a home mortgage loan. Here are a list of documents which you require in order to obtain a home mortgage loan. 

  • Paycheck stubs - Your paycheck stubs for about 2 years, which verify your month to month income. If you are paid electronically, you can access your corporate website to print out the paycheck stubs, since you need to deposit them to your mortgage lender. 
  • Profit and loss statements -  if you are self employed, then you need to povide the profit and loss statement of the current year, especially if the year is half over. 
  • Gift letter - The borrowers, who receive the down payment as cash gift, need to provide a letter from the giftor, who declares the amount is a gift and not a loan. 
  • Tax, investment and bank documents - You need to supply your investment account and bank statements for the last 30 days. However, the lender might ask for the statements for last 3 months if you are applying for a jumbo mortgage loan. It is advisable you make a copy of each of your bonds, stocks, retirement accounts and mutual funds (the investments you have) and submit it to your lender while applying for a mortgage loan. You also have to sign the Form 4506-T, so that the lender can get a transcript of your tax return. 
  • Rental property income documents - If you are planning to rent out your current residence and want to buy a new home, you need to provide a rental agreement along with canceled rent checks. 
  • Other documents - The renters need to provide canceled rent checks of 12 months and bank statements as a proof that they have paid the rent on time. However, the renters can provide the name and contact information of the landlord for the purpose of payment verificaton. 
Other documents related to buying a property
Other than taking out a mortgage loan, there are some other documents which you must be aware of while buying a property. These documents are discussed below. 

  • Home purchase contract - A home purchase contract covers all the issues related to homebuying. From 2012, the contract contains contract addendums, third-party disclosure information, disclosure reports from the seller along with the agents. Along with it, it also comprises of questionnaires, escrow instructions, certifications, disclaimers, advisories, inspections, federal, state and local disclosures, counteroffs, verifications, notices and  receipts for reports. 
  • Poperty insurance contract - This is actually a standard homeowners insurance policy. Usually it covers the property along with medical and liability coverage. This contract usually has a number of exclusions, the names of unforeseen circumstances, whch are not covered under your policy. 
  • Title insurance contract - Nowadays, the title insurance contains the title abstract and the title insurance policy along with exclusions and general and survey information. Therefore, the title insurance contract is approximately of 15 to 20 pages alltotal. 
  • HOA documentation - This documentstaion covers conditions and restrictions, covenants, meeting notes of board of directors, bylaws, budgets, financial statements, disclosures, etc. HOA documentation determine the rights and agreements which affect the borrower as the holder of a single unit, that is, a home or in a condoominium, or in a cooperative apartment within a development. 
Since homebuying requires a lot of paperwork, it is better to hire a lawyer throughout the process, who can review all the documents and make your homebuying process relatively easier for you. 

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