CHAPTER FOUR : CLOSING

Question 1

During the underwriting process, everything’s checked and double checked. Then, this
letter is sent to your ____ providing information on the status. The ___ ____ will provide all of the information everyone involved needs to have in order
to move towards the next step. This will include the amount of money to be borrowed, which is
generally the home’s sale price minus any down payment. It’s the amount the borrower needs to
buy the home.

Answer 1

borrower

loan commitment

Question 2

____ listed in the loan commitment letter. Unfortunately, conditions
are not uncommon. ____ are specific steps that the parties involved must take before the
loan can get final approval. These are often issued by the underwriter on the loan. As long as the
conditions are met, the loan will move forward.

Answer 2

Conditions

conditions

Question 3

____ may include things like proof of mortgage insurance when it applies to the loan and
proof of homeowners insurance. In some cases, there is information that is missing. The conditions
may be dependent on providing proof or documentation of various assets or other information.
Documentation to verify income, debts, or assets, or proof that existing debts are paid off, are
common conditions as well. For example, the home buyer may have to pay off a specific amount
of credit card debt to improve his or her debt to income ratio before the process can move forward.

Answer 3

Conditions

Question 4

Nearly all loans will require

1.
2.

Answer 4

proof of homeowners insurance as well as

title insurance

Question 5

____- For example, the loan may be
ready to go for the new home being purchased, but it is dependent on the old home being sold. This
can cause a few delays in the process. Some real estate markets just are not moving as fast as others
and this can mean that there’s a slowdown in the process. It is not uncommon for the purchase to
be halted until an existing home is sold because carrying that amount of debt in two mortgages is
too risky for the lender

Answer 5

contingencies

Question 6

The final step in the process is the property ___. The loan is officially closed and in place
during the physical signing of documents with the home buyer. The closing of the property is only
complete when the deed is then transferred by the home seller to the lender and home buyer. That
happens after the home buyer’s lender funds the loan and sends the proceeds of the loan to the
escrow company or the home seller directly.

Answer 6

closing