Chapter 12 Flashcards
Closing
The consummation of a real estate contract (settlement). Occurs when the deed is recorded
Closing Disclosure
A standardized document that presents a final, detailed accounting for a real estate transaction, listing each party’s debits and credits and the amount each will receive
or be required to pay at closing; required for all RESPA-related transactions.
Credit
in a closing statement, money to be received or credit given for money or a stated obligation
Debit
in a closing statement, an expense, money, or charge against the seller or buyer
Double Entry
an amount of money on the closing statement for both buyer and seller. It is an amount collected from one party and given to the other party, therefore, a debit to the first party and a credit to the other party
Interim Interest
prorated interest charged at closing to the buyer, through the end of the month and includes the day of closing
Loan Estimate
The disclosure of loan terms, annual percentage rate and other credit costs,
and estimated settlement costs that lenders must present to borrowers within three business days of a completed loan application in order to satisfy provisions of the Truth in Lending Act and the Real Estate Settlement Procedures Act. (TILA/RESPA)
Prepaid Interest
Interim Interest
Prorating
dividing certain settlement costs between buyer and seller
Real Estate Settlement & Procedures Act
(RESPA) law requiring advance disclosure of settlement costs and other specified information mandating specific closing statement forms and prohibiting kickbacks
Settlement
closing
Single Entry
an item that appears as a debit or credit on either the buyer’s or seller’s closing statement, but not on both
TRID
The TILA-RESPA Integrated Disclosure rule, issued by the Consumer Financial Protection Bureau to create standardized, consumer-friendly disclosure documents, including the Loan Estimate and the Closing Disclosure
