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WorksheetsCH 12 - Closing the Real Estate Transaction
Total questions: 35
Worksheet time: 1hrs 10mins
The Know Before You Owe laws require the buyer to receive their Closing Disclosure:
3 calendar days before closing
At the time of closing
3 business days before closing
5 business days before closing
What is the Closing Disclosure entry for a loan on a purchase money mortgage?
credit seller, debit buyer
credit buyer, debit seller
credit buyer only
debit seller only
Closing will take place on November 15th. Annual real estate property taxes are $1,260 and have been paid by the seller in advance. Which of the following would be the appropriate Closing Disclosure entries?
$1,102.50 debit seller/credit buyer
$157.50 credit seller/debit buyer
$1,102.50 credit seller/debit buyer
$157.50 debit seller/credit buyer
If personal property taxes appear on a residential Closing Disclosure, these taxes are normally:
prorated between seller and buyer
single entry debit to seller if the tax bill has been received and not yet paid by seller
double entry item, debit seller/credit buyer, if taxes are to be paid later in the year by buyer.
both single entry debit to seller if the tax bill has been received and not yet paid by seller AND a double entry item, debit seller/credit buyer, if taxes are to be paid later in the year by buyer.
Assume annual real estate taxes amount to $1,800 and have been paid in advance by the seller. If settlement date is set for September 15, which of the following is true?
credit seller $525; debit buyer $1,275
debit seller $525; credit buyer $525
credit buyer $525; debit seller $1,275
Credit seller $525; debit buyer $525
You are purchasing a four-unit apartment building and will close on November 14. Each apartment rents for $575 per month. On November 1, one apartment is vacant and the other tenants have paid the November rent. Compute the rent proration through the day of closing and indicate the proper entries on a Closing Disclosure.
$805 credit seller/debit buyer
$805 debit seller/credit buyer
$920 credit seller/debit buyer
$920 debit seller/credit buyer
Anne buys a home from Kim. She agrees to assume Kim’s existing mortgage loan, which carries an interest rate of 8% and is paid in arrears. Closing is set for July 20. The principal balance of the loan on July 1 is $130,000. How will the prorated interest for July be entered on the Closing Disclosure?
credit Kim and debit Anne for $288.90
debit Anne and credit Kim for $577.78
credit Anne and debit Kim for $577.78
credit Anne and debit Kim for $288.90
Determine the excise tax to be paid on a house that sells for $268,210 if the buyer makes a $25,000 down payment and the seller takes back a second mortgage for $50,000?
$536.42
$537.00
$533.00
$538.00
How much did Michelle net from a sale of her home at $205,000? Her expenses were:
Commission at a rate of 4.6%
$51,000 loan payoff
Excise tax at the standard rate
Deed preparation $15
Courier fee of $15
$144,130
$144,301
$144,311
$145.712
The buyer is going to assume the seller’s 7% loan with a loan balance of $82,000 as of the day of closing, which will be August 11. Of the following, which would be correct Closing Disclosure entries?
$175.38 debit seller/credit buyer and $82,000 debit seller/credit buyer
$175.38 credit seller/debit buyer and $82,000 debit seller/credit buyer
$82,000 credit seller/debit buyer
$82,000 debit seller/debit buyer and $175.38 credit seller/credit buyer
Linda is buying a home for $125,000 with a 10% down payment and borrowing the balance at 7% for 30 years. Closing is August 22, and the lender requires Linda to pay interim interest. Which of the following is true?
Linda will be given a credit of $196.88
Linda will be given a debit of $196.88
Linda will be given a debit of $175.00
Linda will be given a credit of $175.00
The Know Before You Owe provisions of the Dodd Frank Act are enforced by the Consumer Financial Protection Bureau (CFPB). These laws require:
that the closing of a transaction be held within 90 days of the date of the sales contract
that disclosure be made of all settlement costs prior to the settlement date
that the buyer and seller be given disclosures 5 days prior to the closing date
that lenders follow certain advertising procedures when advertising credit
Who is legally permitted to sign documents and execute binding closing documents on behalf of someone else?
an attorney at law
a real estate licensee
a spouse
an attorney in fact
All of the following are true about the borrower's Loan Estimate EXCEPT:
It is subject to permissible variations in relationship to the Closing Disclosure
A licensee is required to review the Loan Estimate of their borrower for its accuracy and completeness
It is provided with an accompanying booklet "Know Before You Owe"
It must be provided to the borrower within 3 business days of loan application
All of the following borrowers should receive a Loan Estimate, EXCEPT:
a borrower who is purchasing a vacation rental
the buyer of a condominium or townhome
the borrower who is purchasing a home from a FSBO
the purchaser of a vacant lot
A licensee is acting as a dual agent representing both the seller and the buyer of a residential property. In regard to the Closing Disclosure statements which of the following statements is true?
The licensee should keep the disclosure statements separate and confidential
Because the licensee represents both parties they are required to provide both the Sellers Disclosure and the Buyers Disclosure to both of the parties
The licensee should encourage the parties to give written consent to share their Closing Disclosures
The licensee must refrain from reviewing either of the Disclosures because it will provide them with the confidential information of the other party
A broker is permitted to transfer funds they are holding as an escrow agent to the closing attorney for the purposes of settlement:
Anytime prior to 10 days before closing
No sooner than 10 days prior to closing
On the 10th day prior to closing
Only between the time of closing the transaction and recordation
The TRID disclosures required at the settlement of a real estate transaction combine the disclosures that are required under which two federal laws?
FCRA & ECOA
ECOA & Reg Z
RESPA & TILA
The Good Funds Act & RESPA
Which of the following would be exempt from the providing of a mandatory Disclosure Statement three business days prior to settlement or closing?
a buyer who can demonstrate an undue hardship caused by the delay
a transaction where the buyer and seller both mutually agree to waive the disclosure timeline
a seller who is financing an impending foreclosure
a buyer who is purchasing a lot and has a separate agreement with a contractor to build a custom home.
Which of the following requires a mandatory Disclosure Statement?
the settlement of 1-4 unit residential
cash transactions
the sale of raw land
commercial real estate
All of the following changes will require the issuance of a new Closing Disclosure and the providing of a new 3 day review period, EXCEPT:
an increase in the APR
a change in the loan product
the addition of a prepayment penalty
the addition of a home inspection fee
the amount of an assumed mortgage appears in:
I. sellers closing statement
II. buyers closing statement
I only
II only
both I and II
Neither I or II
the amount of the earnest money deposit appears in:
Buyers closing statement as a credit
Sellers closing statement as a debit
Buyers closing statement as a debit
Sellers closing statement as a credit
if a property were listed for sale at $130,000 and sold for $128,500, then a 6% brokers fee would appear in the seller statement as a:
Credit of $7800
Debit of $7710
Credit of $7710
Debit of $7800
The cost of preparing a deed appears as a:
Debit in the buyers statement
Credit in the sellers statement
Credit in the buyers statement
Debit in the sellers statement
the day of closing is typically:
Charged to the seller
Charge to the buyer
Split equally between the buyer and seller
It depends on the type of loan
In a real estate transaction, the buyer obtained a VA guaranteed loan in the amount of $60,000 and the lending institution charged 1 discount point, which the buyer agreed to pay. The cost of this point appears as a:
Credit to the buyers statement of $600
Debit to the sellers statement of $600
Debit to the buyers statement of $600
Credit to the sellers statement of $600
A buyer purchased a rental property and closed the transaction on July 20. The tenant had paid rent for the month of July in the amount of $600 on July 1. The rent should be known as:
I - A debit to the seller in the amount of $200
II - A credit to the buyer in the amount of 200
I only
II only
both I and II
Neither I or II
The cost of an excise tax appears as a:
Credit to the seller
Debit to the buyer
Credit to the buyer
Debit to the seller
A property sold for $151,050. The excise tax on this transaction is :
$151
$152
$302
$303
Providing nothing is written into the contract to the contrary in the loan assumption closing, the transferred escrow account will appear on the closing statement as a:
Debit to buyer, credit to seller
Credit to buyer, debit to seller
Proration between buyer and seller
Debit to buy her that does not appear on the sellers statement
In a residential mortgage loan for the purchase of a property transaction, RESPA requires all of the following EXCEPT:
Use of the closing disclosure (CD)
A three day right of rescission
A good faith estimate
The providing of document Shopping For Your Home Loan
Which expenses are typically prorated between the buyer and seller on the closing statement?
Private mortgage insurance
Interim interest
Commission to agent
Real property taxes
Which item is ALWAYS a single sided entry?
Assumed mortgage
Sales price
New first mortgage
Rental income
In North Carolina, the closing meeting is typically held at the:
Listing agents office
Selling agents office
Attorneys office
Courthouse
