Unit 5 North Carolina Property taxes and Settlement Flashcards
An amount charged to a party to pay a bill is a:
Debit
The place where a broker holds money belonging to other parties is the:
Trust account
An amount of 1$ per $500 of purchase price charged when a deed is recorded is called the:
Excise tax
The final settlement created by the terms of the Offer to Purchase and Contract is called:
Closing
A place where a lender holds a borrower’s funds to pay bills at a later time is a:
Lender/ Escrow account
Who owns the day of settlement
Seller
For the test, all prorations will have how many days in a month and how many days in a year?
30 day month / 360 day year
Paid in arrears means:
buyer will pay in the future
Real Property is assessed every:
8 years
In NC Property Taxes attach to the property as of 1 Jan and are due and payable:
September 1st
The settlement is created by the :
Offer to Purchase and contract
brokers who fail to attend the closing settlement may in violation of their _______ duties to the client.
Fiduciary
The North Carolina Good Funds Settlement Act requires that the deed and deed of trust be recorded before what?
Funds may be disbursed
True or False
Excise Tax is rounded down
False
Excise tax is always rounded up
Proration formula :
Total Bill / days in the billing period x days owed
If one party receives a credit the other party must receive:
an equal amount as a debit
Brokers commission formula:
Sale price x commission rate = total commission
Buyers Loan origination fee formula:
Loan amount x Fee (1%)= LOF
Interim interest is:
Loan interest paid from the day of closing to the end of the month. ( never more than 30 days)
Escrow Account Deposit Formula:
EXAMPLE: 4 months real property taxes;
TAXES / 12mo = tax per mo x 4 = 4 mo tax
Mortgage insurance (PMI) formula:
EXAMPLE: 2month mortgage insurance;
Loan x rate= PMI (yr) / 12 mo= PMI mo x 2mo= 2mo PMI
True or False
Seller must pay for a pest inspection on a VA loan.
True
________ are responsible for reviewing the settlement statement for accuracy for the party they represent.
Brokers
by Law in NC the assessed value of property must equal:
market value
What is the entry for a loan assumption balance?
debit the seller, credit the buyer
Which party normally pays for the recording of the warranty deed?
Buyer
