Unit 4: The Closing Process Flashcards

Unit 4: The Closing Process Flashcards

Which type of contract allows a buyer to legally possess the property after all of the terms and conditions have been met?Sale agreement typical prorated items include a variety of expensesReal estate taxes and assessments, or homeowners association duesFuel (e.g., oil in an oil tank)Water and sewer chargesRentSecurity depositsInterest Typical prorated accrued items includeUnpaid real estate taxesTenant's rent the seller collected for a period of time in which the buyer will own the propertyInterest on the seller's mortgage assumed by the buyer (if applicable) Which of these are locations where closings are traditionally held?At the title companyAt the lender's officeAt the local county clerk's officeIn the office of an attorney for one of the parties Who closes on the cooperative brokerage agreement?The agents for the buyer and seller What's a proration?A proportionate calculation based on who actually owes an expense for a given period of time Closing disclosureDocument signed and agreed to at closing that reconciles what the final financial obligations are for both the buyer and seller Who closes on the mortgage loan commitment at closing?The buyer and the lender's attorney Katherine is purchasing a second home as an investment/vacation property. She has a large down payment, and the seller is financing the rest of the purchase. Which of these statements is true?The Closing Disclosure and Loan Estimate aren't required in a seller-financed transaction.So far, we've seen the buyer and seller as they prepare for closing, but what four things does the closing agent do to prepare?Prorate property taxesPrepare closing statementPerform title searchObtain seller's loan payoff amount Jennings has received a Closing Disclosure from his lender. What's the purpose of this form?To detail all costs Jennings will owe at closing How are closings typically conducted?In person or through escrow Which of these is most likely to be the list of individuals who attend a closing meeting?Buyer, seller, licensees who represent the buyer and seller, lender, closing officer Seller net sheetwill help the seller determine what the net proceeds look like if the seller accepts the offer- an estimate tho !Though closing costs vary widely depending on a number of factors, what is the average range of the buyer's closing costs based on the home's purchase price?usually about 2% to 5% In a face-to-face closing, who meets with whom? Buyer and seller meet with one another Which task is NOT the responsibility of an escrow officer?Determine how earnest money is to be distributed in case of a dispute.

The primary purpose of the Real Estate Settlement Procedures Act is to ensure that buyers ______.Know all settlement costs up front Mortgage lending disclosure laws have been around for many years. Which two of these statements about disclosure laws are correct?The Department of Housing and Urban Development originated RESPA; which is currently under the CFPB's purview.The TILA-RESPA Integrated Disclosures, implemented by the Dodd-Frank Act in 2010, mandate the use and timing of loan disclosures.CreditThe amount that appears as a sum in the party's favor-either an already paid, a reimbursed, or promised amount One purpose of the Closing Disclosureto itemize the amounts that the buyer and seller will pay as part of the transaction Which three of the following are good sources of information related to closing costs in a specific geographical area?Local homeowners insurance providersLocal assessor's or property tax officeFEMA flood map service Debitan amount a party has to pay Right before the closing meeting happens, what should the closing agent do to prepare?Order final loan documents.Which of the following parties is responsible for verifying closing statement accuracy?The buyer's agent When is the seller paid the full amount of the purchase price for the property?At the closing What's the purpose of helping buyers estimate closing costs?Doing so provides information about costs before the buyer receives lending disclosures or the closing statement.Prior to signing the closing documents, what should the parties have already done?Assured themselves that the conditions and contingencies of the purchase agreement have been met.It's closing day! Which of the following is likely to happen at this time?The buyer's loan funds will be transferred.When are the mortgage loan commitment and title insurance contract signed?At the closing Which four federally related lending transactions does RESPA cover?New first mortgage loanRefinance loanSecond mortgageHome equity loan One task the closing agent performs is to order and review the title insurance policies, certificate of title, and the agreement of sale.True Why did the implementation of TRID impact closing dates?Certain financing changes may trigger a new three-day waiting period.Which two items will appear on a closing disclosure?Credits and debits Review each statement about the Loan Estimate and Closing Disclosure forms and determine if the statement is true ?The Loan Estimate discloses mortgage loan key features, costs, and risks.The Loan Estimate displays the total principal the borrower will pay.What information does the Loan Estimate provide to buyers under required disclosures law?Loan payment schedule A closing agent has several duties to perform both before and after the closing. Which of the following is a task the

closing agent must complete after the closing?Pay the existing loan off

Elizabeth is financing a new home. She submitted her loan application on Monday, August 3. She's set to close on Thursday, September 21. By what date must her lender provide the Closing Disclosure?September 18 Closing costsProperty transfer fees that aren't included in the sales price Which of the following actions occurs prior to closing?The buyer obtains a binder for insurance coverage on the new home.Which four parties are responsible for verifying that the closing statement figures are accurate?Buyer's licenseeSeller's licenseeBuyerSeller Which two of the following statements are true about

RESPA?

RESPA ensures that consumers are provided specific disclosures when applying for a real estate loan.RESPA requires that lenders disclose all loan fees and the loan payment schedule to the borrower before the borrower commits to the loan.Kelly is closing on the house she's purchasing on Wednesday. Which of these statements is true?The lender must provide the Closing Disclosure by Friday of the week before closing.---Lenders must deliver the Closing Disclosure at least three days before closing.Settlement StatementShows adjustments for expenses paids + owed Corinne, an escrow agent, is preparing for the Thomas/Trenton closing in four days. Which of these documents will Corinne prepare?Working with the lender, she'll prepare the settlement statement, which details the costs the buyer and seller will have at closing.Which of the following is more likely to act as a closing agent?An attorney or title company representative What's true about an escrow closing?All settlement services are handled by a closing agent.Danette hasn't paid the first quarter water bill on her property. It was due on April 1. She's closing with the buyer, Jason, on April 1. What type of expense is this and how will it appear on the settlement statement?This is an accrued expense, and will appear as a seller debit and a buyer credit. - since bill is due but hasn't been paid= accrued Trinity has applied for a home equity line of credit to perform some upgrades on her home. Within what timeframe must her lender provide the Closing Disclosure?The Closing Disclosure isn't required for a HELOC.Lenders must provide the LE to borrowers within three days of loan application receipt.TRID disclosures are required for all federally-related mortgage loan transactions.True statements Typical prorated prepaid items includePrepaid taxesRent paid by the seller under a lease assigned to the buyerUtilities billed and paid in advanceHeating oil in the tank