Mortgage Process 4

Question 1

What is 'cash to close' and what does it typically include?

Accepted Answer

The total funds the buyer must bring to closing, including down payment, closing costs, and prepaid items minus any credits

Answer

Only the down payment amount

Answer

The lender's origination fee only

Answer

The first month's mortgage payment

Question 2

What is the purpose of an escrow impound account in a mortgage?

Accepted Answer

To collect and pay property taxes and insurance on behalf of the borrower

Answer

To hold the earnest money deposit until closing

Answer

To store the original loan documents

Answer

To fund mortgage payments if the borrower is late

Question 3

When must a lender return a borrower's appraisal report?

Accepted Answer

At least three business days before closing

Answer

Only after the loan closes

Answer

Within 30 days of loan denial

Answer

Only if the borrower requests it in writing after funding

Question 4

What is a 'funding condition' in the final stages of the mortgage process?

Accepted Answer

A last-minute lender requirement that must be satisfied before loan funds are disbursed

Answer

A requirement the appraiser must meet before issuing the report

Answer

The condition of the property as noted in the inspection

Answer

A title company's standard fee schedule

Question 5

What is the 'right of rescission' and which mortgage type does it apply to?

Accepted Answer

A three-business-day right to cancel that applies to refinances of primary residences

Answer

The right to cancel any mortgage within 30 days for any reason

Answer

The lender's right to call the loan due immediately

Answer

A buyer's right to renegotiate the purchase price after appraisal

Question 6

What does 'wet settlement' mean compared to 'dry settlement' in a mortgage closing?

Accepted Answer

Wet = loan funds are disbursed the same day as closing; Dry = funds are disbursed after a review period

Answer

Wet = title insurance is included; Dry = title insurance is purchased separately

Answer

Wet = closing occurs in person; Dry = closing is handled remotely

Answer

Wet = the buyer pays cash; Dry = the buyer uses financing

Question 7

What is 'mortgage servicing' and when does it begin?

Accepted Answer

The administration of the loan (collecting payments, managing escrow) after the loan closes and funds

Answer

The process of originating a mortgage, which begins at application

Answer

The lender's review of the borrower's credit report

Answer

The inspection of the property post-closing