Loan Signing: Understanding Notarial Certificates on Loan Documents

In many cases, loan agreements are only as good as the notarial certificates that they include. Without the right notarial certificate, your loan document may be meaningless in the eyes of the law. It is important to note that it requires the physical presence of the borrower to ensure the authenticity of their signature and consent.

What Is a Notarial Certificate?

Notarial certificates are written statements that a notary public signs and seals to certify one or more specified facts of a notarial act. Notarial certificates are most commonly used when administering oaths, taking acknowledgments, and establishing affirmations. They can be divided into jurat (aka affirmation) certificates and acknowledgment certificates. Each of these certificates serves different purposes, provides different coverage, and requires different wording.

Jurat Certificate

Administered by a licensed notary public, a jurat or affirmation certificate requires the signer of a document to affirm the truthfulness and validity of its contents. To accomplish this, the notary must verify the identity of the signer, administer an oath or affirmation to that signer, and serve as a signature witness. The oath/affirmation will swear to the accuracy of the document, and the notary can verify the authenticity of this oath/affirmation by watching the signer place their signature on the document.

Acknowledgment Certificate

Also administered by a licensed notary, an acknowledgment certificate confirms that the signer signed a specific document voluntarily and with a firm understanding of their actions. Like a jurat certificate, an acknowledgment certificate begins with a notary verifying a signer’s identity. By administering an acknowledgment certificate, the notary declares that the signer is who they say they are, understands the document, and signed it of their own free will and for its intended purpose.

Why Are My Loan Documents Getting Notarized?

Notarization is essential if you want to ensure that all the terms and conditions of your loan agreement are legally binding. This protects the mutual and individual best interests of both the borrower and the lender.

When either the borrower or the lender fails to meet the stipulated requirements of a loan agreement, official notarization can solidify cases for the enforcement of those requirements in a court of law. Notarization also protects signers against attempted fraud by ensuring that all parties involved in a loan agreement are exactly who they claim to be.

What Happens During Loan Document Notarization?

It is quite easy to notarize a loan document. First, schedule a meeting with a notary, either in person or online. Second, meet with that notary and all other signers. Take care to bring the loan agreement and a proper form of personal identification (like a driver’s license or a passport) to this meeting. Third, prove your identity, take the necessary oaths/affirmations, and sign the document in the presence of the notary. Finally, pay the stipulated fee for the notary to stamp your document.

Finding a Notary Public and Managing Costs

It is relatively easy to find a notary today. In fact, you can even get a mobile notary or a traveling notary  to come to your home or place of business. And in most states, you can meet with a notary and other signing parties in the virtual space thanks to remote online notarization (RON).

While notary organizations and individual notaries can charge extra for on-site or RON notarization, standard notary fees are both set and enforced at the state level. Notaries can typically charge less than these standard state fees, but they are legally prohibited from charging more.

Typical Loan Documents That Need Notarization

Here are just 15 of the most common documents that generally require notarization. If not legally required, notarization tends to significantly enhance the validity and enforceability of these documents:

1. Mortgage
2. Deed of Trust
3. Deed of Reconveyance
4. Affidavit of Occupancy
5. Truth in Lending Act (TILA) Disclosure
6. Loan Estimates
7. Closing Disclosures
8. HUD-1 Settlement Statement
9. Compliance Agreement
10. Subordination Agreement
11. AKA/Signature Affidavit
12. Power of Attorney
13. Certificate of Satisfaction
14. Transfer of Ownership Documents
15. Promissory Note

What Loan Documents DO NOT Typically Require Notarization?

While promissory notes and other forms of personal loan agreements are not typically required to be notarized, they can benefit from the legal security of notarization. In fact, privately held promissory notes with authenticated signatures will often prove binding in a court of law.

The Safeguards of Notarization

From protecting against fraud by confirming the identity of signers to ensuring that all terms and conditions of your loan agreement are met, notarization safeguards borrowers and lenders in a variety of ways. In short, notarization fosters universal trust and transparency, defending the legitimacy of the loan process as a whole.