Closing and Settlement Flashcards
7 cards from real Mortgage practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Closing and Settlement flashcards as text
Which document provides borrowers with their final loan terms and closing costs at least 3 business days before consummation?
Answer: Closing Disclosure
The Closing Disclosure, required under TRID, must be provided at least 3 business days before consummation so borrowers can review final terms.
What is the right of rescission in a mortgage transaction?
Answer: The borrower's right to cancel certain refinance transactions within 3 business days of consummation
The right of rescission under TILA gives borrowers 3 business days after consummation to cancel certain non-purchase mortgage transactions, such as refinances.
Who typically conducts the closing of a real estate transaction?
Answer: An escrow officer, title company representative, or attorney
Closings are typically conducted by a neutral third party such as an escrow officer, title company, or attorney, depending on state law and local custom.
What is a 'dry closing'?
Answer: A closing where documents are signed but funds are not disbursed at the time of signing
In a dry closing, all documents are signed but the actual disbursement of funds is delayed until certain conditions are met, common in some western states.
What does 'cash to close' represent on the Closing Disclosure?
Answer: The total amount the borrower must bring to the closing table to complete the transaction
Cash to close is the total funds the borrower needs to bring to closing, including the down payment, closing costs, minus any credits or deposits already paid.
Under RESPA and TRID, how many business days before consummation must a lender provide the Closing Disclosure?
Answer: 3 business days
TRID requires lenders to deliver the Closing Disclosure at least 3 business days before consummation, giving borrowers time to review final terms.
What is the primary purpose of title insurance in a mortgage transaction?
Answer: To protect against losses arising from defects in the title or disputes over property ownership
Title insurance protects lenders and/or owners against financial losses from title defects, liens, encumbrances, or ownership disputes that existed prior to the policy date.