Do You Know The Difference Between These Two Documents? [Knoxville Loans For First-Time Buyers]
There are many different Knoxville mortgages for first-time buyers. Each comes with different requirements and regulations. But, they do all come with one commonality: they require a lot of paperwork.
Before home a home is truly your own, you’ll sign off on a lot of paperwork at closing. At closing, you’ll sign off on two very important documents: the deed of trust and the note. Unfortunately, these documents are often confused.
In this post, we’ll explain the difference between these two documents.
The Deed Of Trust
The Deed Of Trust is one of the most important documents that you will sign at closing. In some states, this is referred to as the Mortgage (it’s referred to as a Deed of Trust in the State of Tennessee). This document outlines what happens if a borrower doesn’t make payments.
The Deed of Trust ranges anywhere from 8 to 15 pages, or more, depending on the loan type and mortgage lender. After closing, the Deed of Trust is recorded in the Register’s Office along with the Warranty Deed.
The Deed of Trust is what is recorded within the county as a lien against your property. It’s what secures your loan with the mortgage lender. Should you not make payments, it breaks down exactly what rights a lender has and how foreclosure proceeding would be handled.
The note is another important document that you’ll sign at closing. The note is an agreement between the buyer and the lender on when and how payments will be made. It also outlines what happens if you don’t make your payments.
A typical note is just 3 or 4 pages long, depending on the mortgage company. The note will also contain the terms of your loan. It will break down how often you make payments, your interest rate, and what happens if you don’t make payments.
The note will also contain the following information: your loan terms, payment frequency, if there is a pre-payment penalty, when your first payment is due, date of your last payment, and what happens if you have late payments.
Worried About Closing? Ask For Documents In Advance
When you’re buying your first Knoxville home, there is a lot your will sign. It’s important that you ask any questions you may have before signing these documents. Because if you don’t, you may find it’s too late.
If you have questions or concerns about what you’ll be signing at closing, you can ask to review documents in advance. This will give you plenty of time to ask questions prior to closing. It’s important to feel confident walking into closing. It will make the process smoother.
Your loan officer is a great resource to utilize prior to closing. He or she is there to guide you through the loan process and help you out along the way.
Buying your first Knoxville home is an exciting and overwhelming experience. If you’re like most first-time buyers, you may not be sure where to start. If there is anything we can do to help you in your home search, please do not hesitate to contact us. We’ve helped countless homeowners buy their first home and we’d love to do the same for you. Rick can be reached at 865-696-9002 or via email at Rick@KnoxvilleHomeTeam.Com. Kati can be reached at 865-696-1888 or via email at Kati@KnoxvilleHomeTeam.Com.
Are you ready to start your home search? Visit our home search page to get started today. Or, be sure to keep up with our Knoxville First Time Home Buyer’s Blog to keep up with the latest information about buying your first home.