Finance
Under RESPA, what is the purpose of the Closing Disclosure provided to Delaware homebuyers?
ATo disclose the agent's commission split to the buyer
BTo provide the buyer with an itemized list of all closing costs, loan terms, and cash required at closing at least 3 business days before closing✓ Correct
CTo summarize the seller's net proceeds from the sale
DTo confirm the buyer's employment and income for the lender
Explanation
The Closing Disclosure (CD), required by TRID (RESPA/TILA), must be provided to the buyer at least 3 business days before closing. It itemizes all loan terms, closing costs, and cash needed at closing, allowing buyers to review and compare with the Loan Estimate received at application.
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Key Terms to Know
Closing Costs
Fees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Math Concepts
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