NSA Loan Document Knowledge 3

Question 1

What is the primary purpose of the Notice of Right to Cancel for eligible transactions?

Accepted Answer

To give the borrower three business days to rescind a refinance on their primary residence

Answer

The Notice of Right to Cancel (Right of Rescission) gives eligible borrowers three business days to cancel a refinance of their primary residence.

Question 2

In a purchase transaction, who typically signs the Deed at closing?

Accepted Answer

The seller

Answer

The seller signs the Deed to transfer property ownership to the buyer; the buyer does not sign the Deed.

Question 3

What does 'per diem interest' on a Closing Disclosure represent?

Accepted Answer

Daily interest to cover the period between closing and the end of the month

Answer

Per diem interest is the daily interest amount prepaid at closing to cover the days from closing to the first day of the next month.

Question 4

Which loan type requires a Funding Fee instead of mortgage insurance?

Accepted Answer

VA loan

Answer

VA loans require a VA Funding Fee paid upfront or financed into the loan, rather than ongoing mortgage insurance premiums.

Question 5

The 'cash to close' figure on a Closing Disclosure reflects:

Accepted Answer

The total funds the borrower must bring to closing

Answer

Cash to close is the total amount the borrower must bring to settlement, including down payment, closing costs, and any prepaid items minus credits.

(NSA) Notary Signing Agent Certification Practice Test