Chap. 15 Flashcards
The consummation of the real estate transaction
1) the promise made in the sales contact are fulfilled
2) the mortgage loan fund (if any) are distributed
3) other settlement costs or funds are dispbursed
Closing/ settlement
The buyer’s opportunity to investigate the property and the transaction
Due dull whence period
This test measures the soil’s ability to absorb and drain water
Soil suitability test
The final inspection of the property by the buyer prior to closing to assure that the seller has vacated made required repairs and delivered the property in the condition it was in at contract
Walk through
Usually conducts the proceedings at a closing and calculates the division of income and expenses between the parties
Settlement agent
Was enacted to protect consumers from abusive lending practices
Real estate settlement procedures act
This makes it easier for buyers to compare loan conditions from one lender to another
Good faith estimate
A fee usually as a % of loan amount paid by a lender to a mortgage broker for making a loan at an above market interest rate with little to no origination fee
Yield spread premium
An amount to be paid by the buyer or seller
Debit
An amount payable to buyer or seller
Credit
Shared expenses either prepaid or paid in arrears that are divided equitably between buyer and seller at settlement
Prorations
On a closing statement 1)expenses paid before their due such as hazard insurance or rent also called prepaid 2) a lump sum payment to set up a reserve account such as a deposit of taxes and insurance to set up the borrowers mortgage loan escrow account
Prepaid item
On a closing statement items of expense that are incurred but not yet payable such as interest on a mortgage loan or taxes on real property
Accrued items
Used for most residential settlements consists of three pages
Settlement statement (HUD 1)
Any title defects discovered by this would survive the DDP b/c the seller is raised with providing clear marketable title free of encumbrances
This is known for verifying property lines and possible encroachments
Survey
