Affidavits that may be required at closing are listed here. As you know, an these documents are a sworn statement indicating the truth of the matter stated in the document.
Although the types vary from state to state, the most likely ones are:
The lien waiver is a sworn statement by the owner of real property that there are no liens on the property. Liens can occur from several different sources including:
* Construction Liens;
* Mechanics lien
* Labor liens
* Materialmen liens (those who provide material to construct a building);
* Home improvement liens;
* Water Liens;
* Tax liens.
All these liens can have a big impact on title. When a title insurance policy is requested, the title company will request this document to protect itself from liens either filed or yet to be filed.
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What will the title company do if it determines the lien waiver was false? Well, it has several options. The two basic options are:
1) Demand the signer(s) indemnify (pay back) the title company for any payments it made because of the false statement; and/or
2) Request criminal investigation and charges for filing a false affidavit.
You do not want to see any of these options. So signers should make sure the any potential liens on the property as disclosed or are to be paid at closing.
Occupancy and Financial Status
You may have an occupancy and financial status affidavit in your package. This will also require notarization.
Basically, this document states that the client will live in the home he or she are purchasing as their primary residence and that the clients financial status (ie job) has not changed since the loan application.
Why is this document important to the lender?
Because if you live in your home as your primary residence than you will likely get a better interest rate on your loan. Most people take better care of the home they live in than they do a rental. You are also less likely to default on your own home than you would a rental. Therefore, you get a lower rate.
Any change in financial status is also important to the lender. Many times it may takes weeks or months from the time someone applies for the loan until the closing. The lender wants to be sure nothing has changed.
The signature affidavit is another protection tool for the lender. The signer is assuring under penalty of perjury that this is really his signature as it appears on the loan documents.
**This signature on this document must match exactly as it appears on the Note and Deed of Trust or Mortgage.
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