Finally, you will sign a declaration that the mortgage proceeds are not being used to finance construction or improvements on the property. Without this declaration, the bank's interest in the property may be subject to claims by construction companies who do work on the property around the time the mortgage monies are received by you. To the vendor, you give a direction authorizing how title to the property is to be made out. Your lawyer should review with you at this time the Statement of Adjustments, which is a table showing the credits to you and to the Vendor, and showing ultimately, the amount of money that is required to be paid by you to purchase the house on the date of closing. This is important because the purchase price of the house is never what you actually end up paying on the date of closing.
Adjustments have to be made for property taxes that have been either overpaid or underpaid.
Adjustments have to be made for water and gas accounts that have been either overpaid or underpaid. Sometimes, tenants are involved and an adjustment is required for rent either received or owing. You will be required to bring in the balance of the funds, after deducting the mortgage proceeds, required to close the transaction. On the date of closing, you will pick up the key from wherever it was arranged that it would be available, and you can move in. Next article I will examine the transaction from the vendor's perspective.