Closing the Real Estate Transaction

Question 1

Closing

Answer 1

conclusion of the real estate sales transaction when title to the real estate is transferred in exchange for payment of the purchase price

Question 2

Survey

Answer 2

provides information about the exact location and size of the property

Question 3

Escrow Closing

Answer 3

a disinterested third party is authorized to act as an escrow agent / holder and coordinate closing activities

Question 4

Affiliated Business Arrangement

Answer 4

a package of services offered to customers

Question 5

Mortgage Servicing Transfer Statement

Answer 5

required if the lender intends to sell or assign the right to service the loan to another loan servicer; must notify the borrower at least 15 days before the effective date of the loan transfer

Question 6

Loan Estimate

Answer 6

clearly presents the interest rate, monthly payment and closing costs on the first page

Question 7

Closing Disclosure

Answer 7

itemizes all charges that are normally paid by a borrower and a seller in connection with settlement

Question 8

Closing Statement

Answer 8

accounting of the parties debits and credits

Question 9

Debit

Answer 9

a charge; an amount that a party owes and must pay at closing

Question 10

Credit

Answer 10

an amount in a person’s favor; has already been paid and is being reimbursed at closing

Question 11

Prorations

Answer 11

division of financial responsibility between buyer and seller

Question 12

Accrued Items

Answer 12

expenses to be prorated; owed by the seller but will be paid for after the closing by the buyer (water bill)

Question 13

Prepaid Items

Answer 13

expenses to be prorated; prepaid by the seller but not fully used up so they are credited back to the seller (fuel oil)