HUD-1 Settlement Statement

The Settlement Statement sets forth all the payments and fees paid or received by the lender, the borrower, and the seller, as well as any mortgage broker, real estate broker or or other party performing services in connection with the settlement loan.  The Settlement Statement contains two pages.  Page two contains the breakdown of all commissions and fees paid in connection with the loan and to whom they were paid, organized into columns for the borrower and the seller.  Page one sets forth the funds coming from and going to the borrower and the seller, including the loan proceeds, old mortgage payoffs and prorating any outstanding costs (such as taxes, water bills, etc.) that need to be prorated between the borrower and seller. At the bottom of page one are the total amounts owed by the borrower and to the seller.

Promissory Note

The Promissory Note, also called the Note, is the borrower's written obligation to the lender.  It sets out the terms of the loan. It states the date the loan was made, the lender's name and address, the loan amount, the interest rate and variable terms, if any, the duration of the loan, the amount of the payments, and the monthly due date of the payments.  It also sets forth other terms, such as whether or not there is a prepayment penalty.  It is held by the lender (or any purchaser of the note) until it is paid in full.

Note Rider

The Rider is an amendment to the note which adds language necessary for certain types of properties or loans.  Typically, a rider is used to add additional terms if the property is a condominium or a multi-family property.

Mortgage

The Mortgage is the document that gives the lender security for the loan.  It sets forth the terms under which the lender may foreclose on the property if the loan is not paid.  The mortgage is a lien against the property and is recorded as a public document in the local Registry of Deeds.

Mortgage Rider

The Mortgage Rider is an amendment to the mortgage which adds language necessary for certain types of properties or loans.  Typically a mortgage rider is used to add additional terms if the property is a condominium or a multi-family property.  The mortgage rider is attached to and recorded with the mortgage.

Truth-in-Lending Statement

The Truth-in-Lending Statement ("TIL") is a disclosure that sets forth the major financial terms of the loan.  It lists the the annual percentage rate, the finance charge, the amount of the loan, and the total that will be paid by the maturity date.  The TIL also lists number and amount of the payments, the due dates, the late payment charge, any pre-payment penalty and other information.

Initial Escrow Statement

A certain amount of the monthly mortgage payment goes into an escrow account, held by the lender, and when property taxes and hazard insurance are due, the lender pays them directly.  The amount is calculated by taking the yearly total for taxes and hazard insurance and dividing by twelve to get a monthly total.  This monthly total is added to the monthly principal and interest payment.  The Initial Escrow Statement is a breakdown of the payments made by the lender for property taxes and hazard insurance.

Notice of Right of Rescission

When you refinance, your are given until midnight, three days after you sign the documents (at the closing), to rescind (cancel) the loan with no penalty to you.  The Notice sets forth your rights and states the date by which you may exercise your right.  The notice also provides a place for you to sign stating that the three days have passed and you have decided not to exercise your right to rescind the loan.

Mechanics Lien Affidavit

When hiring a contractor, a homeowner may be asked to sign a Notice of Contract.  The company that performs the work would file the Notice of Contract with the local Registry of Deeds, securing their priority of payment for the value of the work performed and materials furnished.  This becomes a lien against the property.  The Mechanics Lien Affidavit is a document signed by the homeowner stating that there are no such liens against the property.

Radon Disclosure

In the Radon Disclosure the borrower acknowledges having been apprised of the possibiliy of radon gas from underground and agrees to indemnify and hold harmless the lender against claims for personal injury due to radon.

Compliance Agreement

In the Compliance Agreement borrower and seller state that they will re-execute any documents that need to be re-executed and that they will settle any adjustments in the insurance, taxes, water, sewer, electric, gas, oil or condo fees between themselves.