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YOUR CLOSING
STATEMENT IS “IMPORTANT”: When your escrow has closed you
will receive a closing statement which is a summary of the costs and
financial settlement of your real estate transaction. This closing statement
will be important for future tax needs and other possible considerations.
Escrow Number: The
escrow number assigned to your transaction.
Reference: Gives the
address of the property which is the subject of the escrow.
Closing Date: The date the
documents are recorded or delivered. “Close of Escrow”.
CONSIDERATION
TOTAL
CONSIDERATION: Total amount being paid for the property (sales price).
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DEPOSITS
DEPOSIT: Amount of
funds deposited in the escrow (All deposits are detailed separately).
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EXISTING
AND NEW ENCUMBRANCES
FIRST ENCUMBRANCE:
The amount of the Buyer’s new loan.
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PURCHASE MONEY DEED OF
TRUST: The amount of the loan being carried back by the Seller.
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EXISTING LOAN OF RECORD:
The unpaid principal balance of the existing loan which is being assumed or
taken “Subject To”.
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ADJUSTMENTS
RESERVE: Extra funds
requested by escrow holder as a “reserve” in case any closing costs change.
Any funds remaining are refunded at close of escrow.
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PRORATIONS
Procedure wherein monetary
adjustments are made between Buyer and Seller. Items prorated are usually:
INTEREST
FIRE
FLOOD AND EARTHQUAKE INSURANCE
PROPERTY TAXES
HOMEOWNERS’ ASSOCIATION DUES
RENTBACK
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PAYOFF(S)
LOAN TO BE PAID OFF:
The name of the lender being paid off and the unpaid “principal” balance
owing on the loan.
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INTEREST: The rate of
interest or daily interest charge and the dates the interest charge cover
(Remember - loan payments you make cover the previous months’ interest).
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RECORDING FEE: Charged
by lender to record documents with the County Recorder’s Office (ie:
reconveyance).
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RECONVEYANCE FEE:
Charge to issue a “Full Reconveyance” document which is evidence that the
Deed of Trust affecting the subject property has been paid in full and that
the lender and trustee no longer have any interest in the property.
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PREPAYMENT FEE:
Penalty charge for early payoff of the loan pursuant to the terms and
conditions of the note.
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LATE CHARGE(S): Charge
assessed by lender in connection with any payment(s) received late (after
grace period).
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STATEMENT/FORWARDING FEE:
Charge by lender for the preparation of a statement setting out the loan
payoff requirements.
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NEW LOAN
CHARGES
INTEREST: The rate of
interest or daily interest and the dates the interest charge covers. This
expense is referred to as “prepaid interest” and usually covers interest
from the date your new loan is funded to 30 days prior to your first payment
due date.
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CREDIT REPORT:
This fee covers the cost of a credit report, which shows your credit
history. The lender uses the information in a credit report to help decide
whether or not to approve your loan and how much money to lend you.
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APPRAISAL FEE:
This charge pays for an appraisal report made by an appraiser.
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DISCOUNT POINTS:
Also often called “points” or “discount points,” a loan discount is a
one-time charge imposed by the lender or broker to lower the rate at which
the lender or broker would otherwise offer the loan to you. Each “point” is
equal to one percent of the loan amount.
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ORIGINATION FEE:
Loan origination fee but sometimes called a “point” or “points”. It covers
the lender’s administrative costs in processing the loan. Often expressed as
a percentage of the loan, the fee will vary among lenders.
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DOCUMENT
PREPARATION: Fee imposed by lender for production of Buyer’s new loan
documents.
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TAX SERVICE: A
service contract required by lender which notifies lender of any property
tax delinquency during the term of the loan (impound accounts are not
exempted).
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PROCESSING FEE:
Charge imposed by lender for compiling data and information for submission
to underwriter.
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UNDERWRITING FEE:
Charge imposed by lender for the services of their underwriter.
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FLOOD CERTIFICATION
FEE: Verification fee to determine if the property is in a flood
zone.
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WIRE FEE:
Charge imposed by lender to wire transfer your loan funds to the title
company for immediate credit.
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MORTGAGE INSURANCE
PREMIUM: Charge imposed by lender for a one year insurance premium
which insures against loss due to foreclosure (generally required on loans
made with a small down payment).
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IMPOUND FOR
TAXES: Initial amount necessary to establish an account held in trust by
the lender in which the borrower is required to place monthly deposits for
future payment of property taxes.
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IMPOUNDS FOR
INSURANCE: Initial amount necessary to establish an account held in
trust by the lender in which the borrower is required to place monthly
deposits for future payment of hazard (fire) insurance.
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IMPOUNDS FOR
MORTGAGE INSURANCE: Initial amount necessary to establish an
account held in trust by the lender in which the borrower is required to
place monthly deposits for mortgage insurance.
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P.O.C. - PAID
OUTSIDE OF CLOSING: Fees paid from the actual Lender to
the Mortgage Broker outside of escrow (ie. Yield Spread Premium, Servicing
Rebate, etc.). Also, fees for credit reports and appraisals paid prior to
closing.
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DISBURSEMENTS PAID
FIRE INSURANCE: The
first year’s premium for hazard insurance (may also include homeowners
and/or earthquake coverage) as obtained by the Buyer and required by lender.
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PEST INSPECTION/WORK:
Cost of a termite inspection fee and work completed, if any, per contract.
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HOMEOWNERS ASSOCIATION (HOA)
STATEMENT FEE: Fee charged by the Homeowners’ Association to issue their
statement reflecting the current status of dues paid, pending assessments
and any requirements for transfer to Buyer.
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TRANSFER FEE: Fee
assessed by the Homeowners’ Association (Condominiums) to update their
records to reflect new property owner(s).
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DOCUMENT FEE:
Fee assessed by the Homeowners’ Association (Condominiums) for providing any
requested Homeowners’ Association Documents. (If Seller does not have a
complete and current set of Condominium Documents, then escrow holder must
request such documents from the Homeowners’ Association at the Seller’s
expense).
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COMMISSION: The total
dollar amount of the real estate broker’s sales commission, This commission
is typically a percentage of the selling price of the home.
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CERTIFICATE OF
COMPLIANCE: Fee paid to City of Los Angeles in connection with the
filing of the “Water Conservation Certificate”.
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CITY REPORT
FEE: Fee paid to City of Los Angeles, Dept. of Building & Safety to
issue their report regarding permits, certificate(s) of occupancy, impact
hazard glazing, etc.
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PROPERTY DISCLOSURE
REPORT: Disclosure reports indicating whether property is located in
earthquake areas, flood zone, fire area, etc.
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PROFESSIONAL
SERVICES FEE: Fee paid to Real Estate Broker(s) for additional
costs of processing paperwork.
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RETROFITTING: Cost for
installation of smoke detectors, water heater bracing, impact hazard
glazing, low flow shower heads and low flow toilets.
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HOME PROTECTION
POLICY: Policy with varying coverage’s which may include the
plumbing, electrical, heating, air conditioning, water heater, appliances,
pool etc. located at the property.
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TITLE
CHARGES
OWNERS TITLE
POLICY: Charged by the title company for the Title Insurance Policy
which insures title as transferred to the Buyer free and clear of all items
except those provided for in the escrow.
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LENDERS TITLE
POLICY: Charged by the title company for the Title Insurance Policy
required by the Buyer’s new lender.
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TAXES/TITLE
COMPANY: Any real property taxes which are paid through escrow.
SUB-ESCROW FEE: Charged by the title insurance company to cover their
bookkeeping costs when they are required to handle money, either for the
payoff of the Seller’s existing loan(s) or in the receipt of funds from the
lender on the Buyer’s new loan.
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RECONVEYANCE FEE:
Fee charged by the Trustee on the Seller’s existing loan(s) for the issuance
of a Full Reconveyance which must be obtained and recorded to show the loan
has been paid in full (sometimes collected by lender - see PAYOFFS).
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COUNTY DOCUMENTARY
TRANSFER TAX: Charged by the County in which the property is
located and is computed based on the sales price. (Currently $1.10 per
thousand of the sales price in L.A County).
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CITY DOCUMENTARY TRANSFER
TAX: Charged by the City in which the property is located and is
computed based on the sales price. (Currently $4.50 per thousand of the
sales price in the City of L.A.).
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RECORDING FEES: Fees
charged by the County Recorder’s Office for the recordation of documents.
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RECON TRACKING FEE:
Paid to the title company to insure that the trustee prepares reconveyances
in a timely manner and files same with the County Recorder.
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TITLE/MESSENGER FEE:
Messenger fees incurred by the title insurance company.
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TITLE/WIRE
FEE: Cost of wiring funds for loan payoffs and/or to the escrow holder.
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ESCROW
FEES
ESCROW FEES: The base
fee charged by the escrow company for its services. Escrow fees are
determined by the amount of time and liability incurred in the transaction.
Fees quoted are minimum fees for a transaction and if extraordinary time is
required the fee would increase accordingly.
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ORDER DEMAND STATEMENT:
Charged for ordering, reviewing and processing of the payoff statements in
connection with Seller’s existing loan(s).
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ORDER BENEFICIARY
STATEMENT: Charged for ordering, reviewing and processing of the
beneficiary statement obtained in connection with any loan(s) being assumed
by the Buyer.
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ORDER HOA STATEMENT:
Charged for ordering, reviewing and processing the statement needed from the
Homeowners’ Association.
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LOAN TIE-IN FEE:
Charged for the additional work and liability incurred by the escrow holder
in complying with the requirements of the lender for the Buyer’s new loan.
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FEDERAL EXPRESS:
Re-imbursement to escrow holder for actual Federal Express costs incurred.
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DOCUMENT PREPARATION:
Charged for the preparation/completion of various required documents in the
escrow transaction.
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NOTARY FEE: This fee
is charged for the cost of having a person who is licensed as a notary
public swear to the fact that the persons named in the documents did, in
fact, sign them.
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MESSENGER FEE:
Re-imbursement to escrow holder for actual messenger costs incurred.
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