Mortgage Closing and Settlement 3

Question 1

What is the primary purpose of a final walk-through before closing?

Accepted Answer

To verify the property's condition and confirm that any agreed-upon repairs have been completed

Answer

To allow the lender to conduct a final inspection of the collateral before funding

Answer

To give the appraiser a chance to revise the appraisal value if the home improved

Answer

To allow the title company to identify any last-minute liens on the property

Question 2

What does 'proration' mean in the context of a real estate closing?

Accepted Answer

The fair division of ongoing property expenses such as taxes and HOA dues between buyer and seller based on the closing date

Answer

A fee charged by the title company for handling complex transactions

Answer

A reduction in the purchase price negotiated after the appraisal

Answer

The calculation of the borrower's monthly debt-to-income ratio

Question 3

Which party typically pays for the lender's title insurance policy?

Accepted Answer

The borrower/buyer, as it is required by the lender to protect the lender's interest

Answer

The seller, as part of their closing costs

Answer

The federal government through FHA or VA programs

Answer

The real estate agent from their commission

Question 4

What is the VA funding fee charged at closing on VA loans?

Accepted Answer

A one-time fee paid to the Department of Veterans Affairs in lieu of monthly mortgage insurance premiums

Answer

A fee paid to the real estate agent for finding a VA-approved property

Answer

A fee charged by the lender for wiring funds to the title company

Answer

A penalty assessed when the borrower closes before the rate lock expiration

Question 5

What does 'disbursement' refer to at the mortgage closing?

Accepted Answer

The distribution of loan proceeds and other collected funds to appropriate parties such as the seller, payoff lenders, and service providers

Answer

The signing of the promissory note and deed of trust by the borrower

Answer

The cancellation or unwinding of the mortgage transaction

Answer

The recording of the deed and mortgage at the county recorder's office

Question 6

What is a recording fee paid at closing?

Accepted Answer

A government fee paid to the local county or municipal recorder to officially enter the deed and mortgage into public records

Answer

A fee paid to the lender for archiving the loan file

Answer

A fee paid to the title company for preparing the closing documents

Answer

A charge by the credit bureau for the final credit inquiry before funding

Question 7

Under TRID, which of the following changes would trigger a new 3-business-day waiting period before closing can occur?

Accepted Answer

An increase in the APR beyond the tolerance threshold, a change in the loan product, or the addition of a prepayment penalty

Answer

A minor adjustment in the escrow payment amount

Answer

Any revision whatsoever to the Closing Disclosure after delivery

Answer

A change in the closing date requested by the seller