FREE Mortgage Mortgage Closing Procedures Questions and Answers

Question 1

Which document is primarily responsible for itemizing all charges and credits to the buyer and seller in a real estate transaction and must be provided to the borrower at least three business days before consummation?

Accepted Answer

Closing Disclosure (CD)

Answer

Loan Estimate (LE)

Answer

Promissory Note

Answer

Deed of Trust/Mortgage

Question 2

During the mortgage closing process, what is the primary purpose of the 'rescission period' that applies to certain types of loans?

Accepted Answer

To allow the borrower three business days to cancel the loan agreement without penalty after signing.

Answer

To give the lender time to disburse funds after the closing documents are signed.

Answer

To enable the title company to record the deed and mortgage with the county.

Answer

To provide an opportunity for the appraiser to re-evaluate the property's value.

Question 3

A borrower is at the closing table for a purchase transaction. They notice a significant discrepancy between the fees listed on the Closing Disclosure and the last Loan Estimate they received. Under what circumstances would a new waiting period typically be triggered for the Closing Disclosure?

Accepted Answer

If the Annual Percentage Rate (APR) increases by more than 0.125% for a fixed-rate loan.

Answer

If the borrower decides to change the closing date.

Answer

If the real estate agent's commission changes slightly.

Answer

If there's a minor clerical error in the property address.

Question 4

Which of the following parties is typically responsible for preparing and delivering the Closing Disclosure to the borrower?

Accepted Answer

The lender or the mortgage broker (if paid by the lender)

Answer

The real estate agent for the buyer

Answer

The title company or closing agent

Answer

The property appraiser

Question 5

Prior to signing closing documents, a borrower should carefully review the Closing Disclosure. What is one key item they should verify regarding their financial commitment?

Accepted Answer

That the interest rate, loan amount, and monthly payment match what was agreed upon.

Answer

The names of all previous owners of the property.

Answer

The estimated property tax assessment for the next five years.

Answer

The contact information for the utility companies.

Question 6

In a mortgage closing, what is the significance of the 'consummation' date?

Accepted Answer

It is the date the borrower becomes contractually obligated on the loan, even if funds have not yet been disbursed.

Answer

It is the date the loan application was initially submitted.

Answer

It is the date the property appraisal was completed.

Answer

It is the date the borrower officially moves into the property.