A sale of property goes through many phases before the new owner moves into a house. Which of the following dates is the executed transaction date and why did you choose that date?
January 5 – the property is listed
March 1 – the seller accepts the offer
March 29 – new loan papers are signed by the buyer
March 30 – buyer receives settlement statement and all monies are deposited into escrow
March 31 – grant deed and trust deed are recorded
April 1 – broker gets commission
April 15 – seller moves out of the house
April 21 – the buyer moves into the house
B. If the seller of a property has paid both the 1st and 2nd installments of the property taxes for a total annual bill of $3,480, what is the proration of property taxes for both seller and buyer if escrow closes on April 1? Show your calculations.
Part 2
- Define an adjustable rate mortgage and all its key terms such as index, adjustable interval, etc. Then, search the internet and provide an example of an ARM.
- What is the cost of 2 points on a $300,000 loan? Show calculations.
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