YOUR CLOSING STATEMENT IS IMPORTANT
When your escrow has closed, you will receive a closing statement. This 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.
You will notice different terms on your statement.
Here is a breakdown of those items and what each one means to you:
(Note that they are listed in the order and under the Headings you would find them on your Closing Statement)
The escrow number assigned to your transaction.
The address of the property which is the subject of the escrow.
The date the documents are recorded or delivered. The “Close of Escrow”.
Total amount being paid for the property (the sales price).
Amount of funds deposited into the escrow (All deposits are detailed separately).
EXISTING AND NEW ENCUMBRANCES
The amount of the Buyer’s new loan.
PURCHASE MONEY DEED OF TRUST
The amount of the loan being carried back by the Seller.
EXISTING LOAN OF RECORD
The unpaid principal balance of the existing loan which is being assumed or taken “Subject To”.
Extra funds requested by the Allan Erdy Escrow as a “reserve” in case any closing costs change. Any funds remaining are refunded at the close of escrow.
Procedure wherein monetary adjustments are made between the Buyer and Seller. Items prorated are usually: INTEREST, FIRE FLOOD AND EARTHQUAKE INSURANCE, PROPERTY TAXES, HOMEOWNERS’ ASSOCIATION DUES, RENTBACK
LOAN TO BE PAID OFF
The name of the Lender being paid off and the unpaid “principal” balance owed on the loan.
The interest rate (or "daily interest charge") and the dates that the interest charge(s) cover (Remember - loan payments you make cover the previous months’ interest).
A fee charged by the Lender to record documents with the County Recorder’s Office (i.e. Reconveyance).
The 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.
The Penalty Charge for paying off your loan early pursuant to the terms and conditions of the note.
Charge(s) assessed by the Lender in connection with any payment(s) received late (after the grace period).
The charge by the Lender for the preparation of a statement detailing the loan payoff requirements.
NEW LOAN CHARGES
The interest rate (or "daily interest charge") and the dates that the interest charge(s) cover. 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.
The fee covering 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.
This charge pays for an appraisal report as required by the Lender.
Often called either “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.
The Loan Origination Fee, 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.
The fee imposed by the Lender for production of the Buyer’s new loan documents.
A service contract required by the Lender which notifies them of any property tax delinquency during the term of the loan (impound accounts are not exempted).
The charge imposed by the Lender for compiling data and information for submission to the underwriter.
The charge imposed by the Lender for the services of their underwriter.
FLOOD CERTIFICATION FEE
The verification fee to determine if the property is in a flood zone.
The charge imposed by the Lender to “wire transfer” your loan funds to the title company for immediate credit.
MORTGAGE INSURANCE PREMIUM
The charge imposed by the Lender for a one year insurance premium which insures against loss due to foreclosure (generally required on loans made with a small down payment).
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.
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.
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.
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 close of escrow.
The first year’s premium for hazard insurance as obtained by the Buyer and required by the Lender (may also include homeowners and/or earthquake coverage).
Cost of a termite inspection fee and work completed, if any, per contract.
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 the Buyer.
Fee assessed by the Homeowners’ Association (Condominiums) to update their records to reflect the new property owner(s).
Fee assessed by the Homeowners’ Association (Condominiums) for providing any requested Homeowners’ Association Documents. (If the Seller does not have a complete and current set of Condominium Documents, then Allan Erdy Escrow must request such documents from the Homeowners’ Association at the Seller’s expense).
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.
CERTIFICATE OF COMPLIANCE
Fee paid to City of Los Angeles in connection with the filing of the “Water Conservation Certificate”.
CITY REPORT FEE (9a)
Fee paid to City of Los Angeles, Dept.of Building & Safety for the issuance of their report regarding permits, certificate(s) of occupancy, impact hazard glazing, etc.
PROPERTY DISCLOSURE REPORT
Disclosure reports indicating whether property is located in earthquake areas, flood zone, fire area, etc.
PROFESSIONAL SERVICES FEE
Fee paid to the Real Estate Broker(s) for additional costs of processing paperwork.
Cost for the installation of smoke detectors, water heater bracing, impact hazard glazing, low flow shower heads and low flow toilets.
HOME PROTECTION POLICY
Policy with varying coverages which may include the plumbing, electrical, heating, air conditioning, water heater, appliances, pool etc. located at the property.
OWNERS TITLE POLICY
The fee 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.
LENDERS TITLE POLICY
The fee charged by the Title Company for the Title Insurance Policy required by the Buyer’s new lender.
Any real property taxes which are paid through escrow.
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.
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).
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).
CITY DOCUMENTARY TRANSFER TAX
Fee 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.).
Fees charged by the County Recorder’s Office for the recording of documents.
RECON TRACKING FEE
Paid to the Title Company to insure that the trustee prepares reconveyances in a timely manner and files them with the County Recorder.
Messenger fees incurred by the title insurance company.
The cost of wiring funds for loan payoffs and/or to the Escrow Holder.
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.
ORDER DEMAND STATEMENT
The fee charged for the ordering, reviewing and processing of the payoff statements in connection with the Seller’s existing loan(s).
ORDER BENEFICIARY STATEMENT
The fee charged for the ordering, reviewing and processing of the beneficiary statement obtained in connection with any loan(s) being assumed by the Buyer.
ORDER HOA STATEMENT
The fee charged for ordering, reviewing and processing the statement needed from the Homeowners’ Association.
LOAN TIE-IN FEE
The fee charged for the additional work and liability incurred by Allan Erdy Escrow in complying with the requirements of the lender for the Buyer’s new loan.
Re-imbursement for actual Federal Express costs incurred.
Charged for the preparation / completion of various required documents in the escrow transaction.
This fee is charged for the cost of having a person, licensed as a Notary Public, swear to the fact that the persons named in the documents did, in fact, sign them.
Re-imbursement for actual messenger costs incurred.