Mortgage Terms All of Michigan
Sales Commission
This is the charge from the real estate company or builder's representative who
sold the property to the home buyer. For the real estate company the charge is
generally a percentage of the sale's price. The builder's representative may
receive a straight fee per house. The seller usually pays the fee.
Servicing Disclosure Statement
This covers the fact that servicing of your loan may be transferred by your
lender to another institution. It also reminds you of your consumer rights
regarding the servicing of your loan. See Servicing Disclosure Form.
Signature Affidavit
People with bad penmanship take note. This document is a notarized copy of your
legal signature. Your chicken-scratch on all your loan documents better be a
good match for what appears here. Stamps
This is a tax imposed by the municipality, county, or state, on the deed and
mortgage loan agreement upon sale or when a new mortgage is obtained. State law
may say who pays there taxes. Survey
All land being sold must have a current deed. In the case of a home buyer the
land will change hands from the seller to the buyer. This information is
recorded at the county courthouse. An engineer must do the survey A plat or
survey is made to show the loan measurements and house with all the easements
and /or encroachments thereon for title purposes. The is done to be sure that
the house and the lot being sold are one and the same. It also states that the
measurements called for in the deed are the same and shows recorded or
unrecorded easements or restrictions against the lot. Taxes
These are the real estate taxes levied on the home by the city and / or county.
They are normally collected by the mortgage company which includes them in the
monthly payment. At the loan closing the taxes are usually pro-rated, meaning
that the seller pays his share of the taxes up to the closing date and the buyer
pays from that date forward. The number of months' worth of taxes to be put into
the escrow account is determined by the due date on the tax bill. For example,
if the loan closing occurred March 30 and the tax bill was due on October 1.
Since the seller pays three months, January, February, and March taxes due on
October 1. Since the buyer's first payment is not due until May 1, which would
bay for April, there is a remainder of four months' taxes due on October 1. At
the closing, there four month's payments plus two for reserve would be payable,
at the prerogative of the mortgage company. As a general rule the mortgage
company collects two months extra on anything that need to be paid out. This
insures payment of the tax bill, which has a due date from the city or county,
on time without regard to the time that the buyer might make his mortgage
payment. The mortgage company has the funds, previously collected, to pay the
bill in a timely manner. Termite Inspection
A charge for a termite letter or termite bond which states that there is no wood
damage or infestation of any kind from any wood destroying insects.
Title Insurance
The lender will require a title insurance policy. There is a one time charge for
this. It protects the lender against any loss due to defects in the title of the
property. Any claim that would cause problems with the lender's first lien on
the property that was not detectable through the title search would be protected
with the title insurance. This policy offers limited protection to the home
buyer. A policy can be purchased to protect the new homeowner and it is called
an Owner Title Policy. There is a one time charge for this.
Truth-in-Lending Disclosure
The full title of this document should the "final, final truth-in-lending
disclosure" since it follows other truth-in-lending disclosures made earlier in
your loan process. It tells exactly what you are supposed to pay and to whom,
including how much in interest you will pay over the life of the loan. In
accordance with the Real Estate Settlement Procedures Act (RESPA) of 1973, the
lender and other professionals provided a mortgage related service to you are
required to give you truth-in-lending disclosure upfront. This is so you have a
reasonable idea, every step of the way, of what your ultimate costs will be.
Since you may request additional services or you may decide to go from a fixed
rate to an adjustable one, for example, the total amount you owe could easily
change. The truth-in-lending disclosure provided as part of your closing package
is the last word. See Truth-in-Lending Disclosure Form. RESPA, Real Estate Settlement Procedures Act, sets the maximum amount
that a mortgage company can require a buyer to deposit into the escrow account
at loan closing. In some cities and counties a deduction on taxes is allowed
anyone living in his house of January 1. This deduction is called Homestead
Exemption. The homeowner must file for this deduction by a certain date or lose
the exemption for that year. The closing attorney will know if this applies. Property taxes are set from year to year. The assessment of the property and
the tax millage rate of the city or county affect the total tax bill. Budget
proposals are always changing so keep some extra money aside for our government.
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