During closing, the borrower notices the property taxes shown on the Closing Disclosure are $200 higher per month than disclosed on the Loan Estimate due to a recent tax assessment. This increases the debt-to-income ratio from 42% to 44%. What action is required?
Correct Answer
B) Provide a corrected Closing Disclosure and restart the three-day waiting period
An increase in the monthly payment due to higher property taxes requires a corrected Closing Disclosure and a new three-business-day waiting period, even if the change was due to external circumstances like a tax reassessment.
Why This Is the Correct Answer
An increase in the monthly payment due to higher property taxes requires a corrected Closing Disclosure and a new three-business-day waiting period, even if the change was due to external circumstances like a tax reassessment.
More Mortgage Knowledge Questions
A borrower is comparing two loan offers: Loan A has no points and 4.5% interest rate, Loan B has 2 points and 4.0% interest rate. The loan amount is $400,000. How much will the borrower pay upfront for the points on Loan B?
A lender charges a 1% origination fee on all loans. For a borrower obtaining a $250,000 mortgage, what is the maximum origination fee that can be charged without violating the points and fees test under the ATR/QM rule for a first-lien mortgage?
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A borrower is considering paying discount points to reduce their interest rate. Each point costs 1% of the loan amount and reduces the rate by 0.25%. On a $300,000 loan, how much would the borrower pay for 2 discount points?
A borrower asks about the difference between discount points and origination fees. What is the most accurate explanation?
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