RE-160 Lecture Notes - Lecture 25: Discount Points, Mortgage Loan, Insurance
18 Dec 2020
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An event where promises made in a sales contract are fufilled and mortgage loan funds are distributed to buyer. Loan origination fee, discount points, appraisal fee (approx. ), credit report fee, mortgage insurance premium if needed. A purchase for k with 10% down payment requires a mortgage loan of k (k - k) - k. A point is 1% of the loan amount, ,650. (1% x k). The buyer must bring 2 points (2 x ,650 = ,300) plus the down payment (k), to the closing (,300 + ,000 = Prepaid items are expenses that have been paid by seller but are not fully used up, these items are prorated and appear as a credit to the seller. Rent vs. buy = none of these costs if renting. Seller"s typical closing costs much higher. Title insurance for buyer (based on property value) Remove any liens against the property (mortgage, etc. )
