A Closing Disclosure lists a loan amount of $320,000, closing costs of $9,000, and lender credits of $2,000. Where should the consumer look to understand the final amount needed at closing after all disclosed adjustments?
Correct Answer
C) The Calculating Cash to Close section
Why this is correct: The "Calculating Cash to Close" table on the Closing Disclosure is specifically designed to show the consumer the final amount they need to bring to the closing table. It takes the total loan amount, adds total closing costs, subtracts lender credits and any deposits, and accounts for other adjustments to calculate the final sum due from or to the consumer. Why the other choices are wrong: The choice "Only the note-rate box" is wrong because the note rate shows the interest rate on the loan, not the cash required at closing. The choice "Only the projected-payments table" is wrong because that table shows estimated monthly payments for principal, interest, and escrow items, not the lump sum needed at closing. The choice "The NMLS identifier field" is wrong because that field identifies the loan originator and has no bearing on financial calculations. Exam tip: For any question about the final amount of money the borrower needs to bring to closing, direct your attention immediately to the "Calculating Cash to Close" section of the Closing Disclosure.
Why This Is the Correct Answer
Why this is correct: The "Calculating Cash to Close" table on the Closing Disclosure is specifically designed to show the consumer the final amount they need to bring to the closing table. It takes the total loan amount, adds total closing costs, subtracts lender credits and any deposits, and accounts for other adjustments to calculate the final sum due from or to the consumer. Why the other choices are wrong: The choice "Only the note-rate box" is wrong because the note rate shows the interest rate on the loan, not the cash required at closing. The choice "Only the projected-payments table" is wrong because that table shows estimated monthly payments for principal, interest, and escrow items, not the lump sum needed at closing. The choice "The NMLS identifier field" is wrong because that field identifies the loan originator and has no bearing on financial calculations. Exam tip: For any question about the final amount of money the borrower needs to bring to closing, direct your attention immediately to the "Calculating Cash to Close" section of the Closing Disclosure.
More Origination Questions
Before the team acts on a servicing handoff check, a closing coordinator must address Asset Verification and Reserves. Which response is most defensible?
An MLO is reviewing procedures for a case where a cost changes after the Closing Disclosure has already been provided. What is the proper handling?
During a post-application update, a quality-control reviewer encounters a Credit Analysis and Evaluation issue. Which response should avoid a shortcut that would misapply the rule?
A construction-to-permanent loan will disburse in 5 draws over 11 months before the permanent phase begins. Which Regulation Z appendix provides a disclosure method for multiple-advance construction transactions?
Before closing, the team discovers that a borrower asks which upfront charge can be collected before intent to proceed. What is the safest compliant answer?
A construction loan agreement allows advances only after documented completion of specified work. A builder requests the next draw, but no completion evidence has been provided. What should occur?
Before releasing the final construction draw, which combination most directly supports project completion and clear collateral?
A construction-to-permanent loan will convert to a substantially higher fully amortizing payment. Which payment is especially important when assessing the borrower's long-term repayment capacity?
A construction-to-permanent note states that conversion requires completion, a certificate of occupancy, and no unresolved liens. Construction is finished, but a mechanic's lien remains. What should happen?
A branch manager asks about a loan file because a processor wants to omit known monthly obligations from underwriting. What should happen?
People Also Study
Federal Mortgage-Related Laws
24% of exam
General Mortgage Knowledge
20% of exam
Ethics, Fraud & Consumer Protection
18% of exam
Uniform State Test Content
11% of exam
Related Study Resources
Previous Question
A borrower sees a prepayment penalty disclosed on the Closing Disclosure that was not part of the agreed loan. What should the borrower and creditor do before consummation?
Next Question
A construction-only phase has an initial term of 12 months and will be followed by a separate covered permanent mortgage. Under Regulation Z's ATR rule, which statement is accurate?