Essential Closing Materials Needed by Mortgage Lenders and Real Estate Agents in Massachusetts

In Massachusetts, both mortgage lenders and real estate agents must ensure that all necessary documents and materials are prepared for a smooth closing process. Here is a list of key closing materials required by both professionals to avoid delays and ensure a legally compliant real estate transaction.

1. Purchase and Sale Agreement (P&S)

This contract outlines the terms agreed upon between the buyer and seller, including the purchase price, contingencies, and deadlines. Both mortgage lenders and real estate agents need to have a signed copy of the P&S agreement to confirm the deal's terms and move forward with financing and legal preparations.

2. Loan Commitment Letter

Mortgage lenders must provide a loan commitment letter that confirms the buyer’s loan approval, including terms such as interest rate, loan amount, and the type of mortgage. This document is crucial for real estate agents as well since it verifies the buyer’s ability to secure financing, ensuring the sale can proceed as planned.

3. Title Search and Title Insurance

A clear title is essential for any property transaction. Mortgage lenders require a title search to ensure there are no outstanding liens or claims against the property. Real estate agents also need this verification to assure their clients that the property has a clean title. Title insurance, which protects against future title disputes, is typically arranged by the attorney handling the closing.

4. Mortgage Payoff Statement

For properties where the seller has an outstanding mortgage, a payoff statement is needed to calculate the exact amount owed to the lender. Mortgage lenders need this document to ensure the current mortgage is satisfied before transferring ownership, while real estate agents should confirm that this step is completed to avoid complications.

5. Closing Disclosure (CD)

The Closing Disclosure is a key document provided by the mortgage lender that outlines all final loan terms, closing costs, and fees. This document must be given to the buyer at least three days before closing. Real estate agents should review the CD with their clients to ensure all fees and terms are correct and understood.

6. Deed

A new deed, which transfers ownership of the property from the seller to the buyer, must be prepared by the closing attorney. Mortgage lenders require a properly executed deed as proof of ownership transfer, and real estate agents need to ensure the deed reflects the correct names and property details.

By having these documents prepared and organized, both mortgage lenders and real estate agents can help facilitate a smooth and efficient closing process in Massachusetts.