This form is also used for cash transactions by many settlement to show how the closing costs were calculated. Page 1 of the form shows: Closing information – Includes date issued, closing date, disbursement date, settlement agent, file number, property address, and sale price Transaction information – Includes names and addresses for both the borrowers and
sellers and the lender’s name Loan information – Includes the loan term, purpose of the loan, product type, loan type and loan ID number Loan Terms - Gives the exact figures for the loan amount, interest rate, and monthly principal and interest payment, and indicates whether any of those amounts can increase after closing Projected Payments - Shows the actual payments the borrower will make for principal & interest and mortgage insurance, an estimated amount for the escrow payment, and the total estimated monthly mortgage payment Costs at closing - Shows the borrowers’ total closing costs and the total amount of cash the buyers need to bring to closing End of Page 18 . The Closing Disclosure (continued) Settlement amounts start on page 2 of the form. The page is divided into four columns: Column 1 – Description of the costs Column 2 – Costs paid by the borrower – designated as being paid either “at closing” or “before closing” Column 3 – Costs paid by the seller – designated as being paid either “at closing” or “before closing” Column 4 – Costs paid by others The first section deals with the loan costs : A. Origination charges - Items such as points, application fee, and underwriting fee B. Services the borrower did not shop for - These are items the lender requires for the loan, such as appraisals and credit reports. C. Services the borrower did shop for - These are items the borrower can get on his own, such as pest inspections, survey fees, and title insurance. D. The total of the costs of A, B, and C above
19 . The Closing Disclosure (continued) The next section deals with other costs : E. Taxes and other government fees - Items such as recording fees and transfer taxes F. Prepaids - These are items paid for in advance, such as homeowner’s insurance and property taxes. G. Initial escrow payment at closing - An escrow account is an account where money is held for certain payments until they are paid out – typically for insurance and taxes. The lender gives the borrower a statement that tells how much money it requires the borrower to put into the account each month. H. Other costs not covered elsewhere on the disclosure - Items such as HOA fees, home warranty fees, home inspection fees, and real estate commission I. The total of the costs of E, F, G, and H above Section J gives the total closing costs to the borrower (D + I from above). This total will be moved to the bottom of page 1 under the heading “Costs at Closing – Closing Costs.”
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