1. Analyze a residential property using the following information:

Purchase price: $150,000

Real estate loan

o 85% loan to value

o 30 year amortization

o Interest rate 4%

o 3 points at closing

o Monthly interest payments

Settlement cost use table (1)

o Adjustments to table (1)

Purchase price

Deposit $5,000

Amount of loan

Prepaid interest: 10 days

Loan origination: 2% (same as points)

Loan discount: 1% (same as points)

Real estate brokerage fee: 5%

Redo table (1) using the latest information above

Redo table (2)

o Amount due from buyer

o Amount due to seller

o Assume information:

Payoff existing loan to be the same

2. As residential home loan agent,

Discuss how the closing statement works?

Who completes the closing statements?

How does the bank get involved in the closing process?

What are the examples of problems when completing the closing statements?

Where is the closing using located?

Make an example of a closing statement used by banks.

\begin{tabular}{|c|c|c|c|c|c|c|} \hline & A & B & c & D & E & F \\ \hline 30 & & & Table (2) & & & \\ \hline 31 & \multicolumn{3}{|c|}{ Settlement Statement - second part } & & & \\ \hline 32 & & \multicolumn{2}{|c|}{ 1. Amount Due from Buyer: } & & & \\ \hline 33 & & & (A) Purchase price & & & \\ \hline 34 & & & Plus settlement charges & 1,000.84 & & Given \\ \hline 35 & & & Less: Property tax proration & 181.24 & & Given \\ \hline 36 & & & Less: Earnest money & & & \\ \hline 37 & & & Less: Mortgage loan & & & \\ \hline 38 & & & Net amount due from buyer & & & \\ \hline \multicolumn{7}{|l|}{39} \\ \hline 40 & & \multicolumn{2}{|r|}{ Buyer's Share of Settlement Charges: } & & & \\ \hline 41 & & & Loan origination fee & - & \multirow{3}{*}{\begin{tabular}{l} equals \\ equals \end{tabular}} & D11 \\ \hline 42 & & & Loan discount fee & - & & D12 \\ \hline 43 & & & Appraisal fee & 125.00 & & Given \\ \hline 44 & & & Credit report & 45.00 & & Given \\ \hline 45 & & & Mortgage insurance application fee & 50.00 & & Given \\ \hline 46 & & & Interest & & & \\ \hline 47 & & & 2 months premium - escrow & 92.00 & & Given \\ \hline 48 & & & 2 months property tax-escrow & 132.84 & & Given \\ \hline 49 & & & Title insurance (lender) & 100.00 & & Given \\ \hline 50 & & & Recording fee & 31.00 & & Given \\ \hline 51 & & & Closing fee & 75.00 & & Given \\ \hline 52 & & & Title insurance (lender) & 350.00 & & Given \\ \hline 53 & & & Total & & & \\ \hline \multicolumn{7}{|l|}{54} \\ \hline 55 & & \multicolumn{2}{|r|}{ II. Amount Due to Seller: } & & & \\ \hline 56 & & & Sales price & & & \\ \hline 57 & & & Less: Property tax proration & 181.24 & & Given \\ \hline 58 & & & Less: Payoff of existing loan & 21,284.15 & & Given \\ \hline 59 & & & Less: Settlement charges & & & \\ \hline 60 & & & Net amount due to seller & & & \\ \hline \multicolumn{7}{|l|}{61} \\ \hline 62 & & \multicolumn{2}{|r|}{ * Seller's Share of Settlement Charges: } & & & \\ \hline 63 & & & Broker commission & 5.00 & & Given \\ \hline 64 & & & Recording fee & - & equals & D27 \\ \hline 65 & & & Total & & & \\ \hline \end{tabular}