Escrow & Title
Under RESPA, a Closing Disclosure must be provided to the buyer at least how many business days before closing?
A1 business day
B3 business days✓ Correct
C5 business days
D7 business days
Explanation
RESPA requires that lenders provide the Closing Disclosure to the buyer at least three business days before consummation of the mortgage loan.
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Key Terms to Know
Proration
The division of ongoing property expenses (taxes, HOA dues, rents) between buyer and seller at closing based on their respective days of ownership.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
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.
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