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Closing Documents
Real Estate Closing Documents Terms
| Term | Definition |
|---|---|
| USA Patriot Act Information Form | To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies every customer. |
| Initial Escrow Account Disclosure Statement | This is an estimate of activity in your escrow account during the coming year based on payments anticipated to be made from your account |
| Tax Escrow Account Designated of Mortgage Investing Institution to Receive Tax Bills | By completing and signing this form, an owner of real property designates a mortgage investing institution (most commonly a bank) to receive all tax bills relative to the real property which is subject to the mortgage |
| Flood Hazard Determination | The National Flood Insurance Reform Act provides that if the loan servicer at any time determines that the Property is in a Special Flood Hazard Area the loan servicer must notify the borrower that flood insurance must be obtained. |
| Borrower’s Certification & Authorization | In applying for the loan, borrower completed a loan application containing various information on the purpose of the loan, the amount and source of the down payment, employment and income information, and assets and liabilities. No misinterpretations |
| Annual percentage rate (APR) | The annual cost of a loan to a borrower. Unlike an interest rate, it includes other charges or fees to reflect the total cost of the loan. Borrowers can use the APR as a good basis for comparing the costs |
| Application fees | Nonrefundable fees paid when you apply for your loan. These fees may include charges for items such as, for example, a credit profile or a property appraisal. |
| Appraisal or appraised value | An informed estimate of the value of a property. When made in connection with an application for a loan secured by a home, a professional appraiser usually performs the appraisal. |
| Appraisal contingency | A contingency in a sales contract that the property must appraise at a value that is equal to or greater than your offering price. |
| Assessed value | The value of a property, established by a public tax assessor. The assessed value is used to determine property taxes. |
| Broker fees | Fees charged by a real estate broker or a mortgage broker for providing assistance in a real estate transaction. |
| Cash to close | he amount a homebuyer needs in cash at the closing of the loan. This typically, this includes down payment and closing costs. |
| Cash-out refinance | Refinance in which the new loan amount exceeds total of the principal balance of existing mortgage(s)/liens & closing costs. This excess is usually given to borrower in cash and can be used for debt consolidation, home improvement. |
| Chain of title | The history of all of the documents affecting title to a parcel of real property, starting with the earliest existing document and ending with the most recent. |
| Clear title | Titles that are marketable and are free of liens or disputed legal questions as to ownership of the property. |
| Closing | The time and place, at which all documents for your loan are signed, dated, and notarized. |
| Closing costs | Costs may include and are not limited to: attorney's fees, preparation and title search fees, discount points, appraisal fees, title insurance, and credit report charges. |
| Closing Disclosure (CD) | A closing document which provides key information such as interest rate, monthly payments, and costs to close the loan. |
| Contingency | A specified condition in a sales contract that must be satisfied before the home sale can occur. When buying a home, the 2 most common contingencies are that the house must pass inspection and that the borrower must be approved for a loan. |
| Conventional loan | A home loan that is not insured or guaranteed by the federal government. |
| Credit report | A record of an individual’s debts and payment habits. The 3 major credit bureaus that provide credit reports are Equifax, Experian and TransUnion |
| Credit score | In general, the higher your credit score, the more likely you are to be approved for and to pay a lower interest rate on a loan |
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