You shouldn’t be alarmed if ALTA Explained settlement statements seem complicated; they’re rather straightforward. Alta has developed settlement statements to facilitate the sale of real estate. They include columns for the vendor and the customer, as well as a breakdown of expenses.
You are still expected to fill it out correctly, even if a notary is usually not required to sign this paperwork by BlueNotary.
The ALTA settlement statement – what is it?
The ALTA Explained settlement statement lists the costs the buyer and seller must pay at real estate settlement. This document includes the sale price, loan amounts, and school taxes.
All parties involved in the transaction, including brokers and agents, receive the statements.
At the very conclusion of the ALTA Explained, there is a signature addendum that both the buyer and the seller must sign by using Online Signature Generator during the signing by BlueNotary.
The sections in the ALTA settlement statement
We will go over each section of the ALTA Explained settlement statement.
Details on the Participants
The document’s first section contains basic information on the people and organizations participating in the deal. Among them are:
Escrow File no
Each transaction has a unique number, which allows you to quickly retrieve all the details.
Names
This section also includes the names of the following parties: the buyer, the seller, the escrow officer, and the lender.
Print Date and Time
You may see when and when the document was printed by selecting the Print Date and Time option.
Title Company Logo
The logo of the title firm is displayed on the right side of this section.
Settlement Location
The site where the closing will take place is known as the settlement location. Where the title firm is located usually doesn’t matter.
Property Address
The physical location of the real estate transaction.
Settlement Date
The date set for the closing is known as the settlement date.
Disbursement Date
The disbursement date is when the seller expects payment in their bank account. Settlement and payment dates are usually the same.
Other Dates
Deadlines for recording or anything else having to do with transferring property ownership.
Financial
The buyer is liable for the costs incurred under financials. Therefore, they appear as both a debit to the buyer and a credit to the seller. Items falling under these categories of expenses are:
Sales Price of the Property
Including all costs and fees, the agreed-upon selling price of the seller’s property.
Personal Property
In addition to the house, buyers must pay for appliances and furniture. Buyers debit and sellers credit.
Deposit including earnest money
A buyer pays “earnest money” to the seller when they sign by Online Signature Generator a purchase or sale agreement to show good faith. It could be 1%–2% of the home’s price.
Loan Amount
The sum that the lending institution has agreed to lend.
Existing Loan(s) Assumed or Taken Subject to
The amount that will appear in this area will reflect whether the buyer has chosen to assume the seller’s current mortgage.
Seller Credit
After a successful negotiation, the seller will fund the buyer’s closing costs.
Excess Deposit
Everything that the seller and buyer have agreed to pay is in the escrow.
Prorations / Adjustments
These expenses, which stem from things like HOA dues and county taxes, are the seller’s responsibility. From the date of last month’s payment until the date of ownership transfer, the price is often changed.
School Taxes from (date) to (date)
From the last payment, until the title is transferred, there will be school taxes to pay.
County Taxes from (date) to (date)
This is subject to change based on the County’s tax schedule, but it typically builds up in the same way.
HOA dues from (date) to (date)
The seller’s account is deducted in the same way as previously mentioned for HOA dues.
Seller Credit
If the parties have agreed that the seller will pay a portion of the prorations, then that amount will be displayed here.
Loan Charges to (lender co.)
The vendor will pay these expenses directly to the lender. Therefore, the buyer will see them as a debit. On the other hand, beneath the debit column, the seller’s name will display if they have agreed to pay some of the charges. The components of Loan Charges’ costs are as follows.
Points
Lenders receive mortgage points in exchange for lowering their interest rates for borrowers. This sum is paid in advance at the time of closure.
Application Fee
Lenders charge application fees to complete mortgage applications.
Origination Fee
Origination fees are the lender’s bank account establishment costs for the mortgage process.
Underwriting Fee
The mortgage application process begins with Underwriting, which is the administrative side of things.
Mortgage Insurance Premium
This expense needs to be paid for down payments that do not exceed 20% of the total mortgage amount, so it might not appear on the list very often.
Prepaid Interest
The buyer’s first monthly mortgage payment is the sum that is computed from the date of closing until that date.
Other Loan Charges
These are supplementary fees that will be deducted from the purchaser’s account. Third parties are frequently compensated alongside the lender for these cost components.
Appraisal Fee to
Amount paid to a lender or an appraisal firm for use in establishing a property’s market value.
Credit Report Fee to
The buyer’s credit report processing fee. The buyer typically foots the bill.
Flood Determination Fee to
The property is not situated in a flood-prone location and the government has approved it, thus the fee is paid.
Flood Monitoring Fee to
In order to monitor situations related to floods, the buyer pays this fee.
Tax Monitoring Fee to
A tax monitoring fee is paid to an outside entity that verifies if buyers have any outstanding taxes. This cost is charged to the customer.
Tax Status Research Fee to
A third party will be paid to verify that the lender has received overdue payments.
Impounds
All the fees that are paid to process the mortgage are bundled together and called an impound.
Homeowner’s Insurance
The sum that is owed for homeowner’s insurance.
Mortgage Insurance
The sum that is owed for mortgage insurance.
City/town taxes
The amount owed by the city or town.
County Taxes
The total amount of payable county taxes.
School Taxes
The total amount of school tax that needs to be paid.
Aggregate Adjustment
An estimate is made to ensure that the buyer’s lender does not obtain more funds from the buyer than what is permitted by RESPA. (The new homeowner’s property tax and insurance payments cannot exceed one-third of those funds in their possession).
Title Charges & Escrow / Settlement Charges
Purchasers are subject to escrow or title company fees and settlement charges. The purchaser is responsible for covering these expenses.
Owner’s Title Insurance
The sum that the buyer has paid to secure ownership of the property.
Owner’s Policy Endorsement(s)
Presents the owner’s stance on the transaction by the endorsement(s) of their policy.
Loan Policy of Title Insurance
The borrower pays title insurance premiums to protect the lender from title disputes.
Loan Policy Endorsement(s)
Endorsements for Loan Policies Modify the lender’s title insurance policy so it covers the particular deal.
Title Search to
The buyer is typically responsible for covering the expense of doing a title search.
Insurance Binder to
The buyer purchases a two-year insurance binder to agree to the issuing of a title policy.
Escrow / Settlement Fee to
Charges for carrying out the settlement, sometimes known as an escrow or settlement fee.
Notary Fee to
A fee is paid to a notary public in order to have them witness the signing of documents.
Signing Fee to
Officially certifying Extra money to be given to the notary.
Subtotal
The combined amount of all expenses is shown on the buyer’s and seller’s side of the invoice.
Acknowledgment
Both the buyer and the seller confirm that they have received and reviewed the ALTA Explained statement. On top of that, it says that the parties are giving the title firm permission to pay out the money as described.
Conclusion
ALTA Explained makes it easy to see how money is moving between the buyer and the seller. After the closing process by BlueNotary, BlueNotary paints a clear picture of what each party can anticipate to pay and receive.
FAQ for ALTA Explained Settlement Statements
What is the purpose of the ALTA Explained Settlement Statement?
The ALTA Explained Settlement Statement is designed to itemize the costs and fees associated with a real estate transaction. It provides a detailed breakdown of the financial responsibilities of both the buyer and the seller, including the sale price, loan amounts, and taxes. This document ensures transparency and helps all parties understand their financial obligations at the closing.
Do I need a notary to sign the ALTA Explained Settlement Statement?
Typically, a notary is not required to sign the ALTA Explained Settlement Statement itself. However, it is crucial to fill out the document correctly. BlueNotary provides an Online Signature Generator that both the buyer and the seller must use to sign the document at the end of the transaction. This ensures that all signatures are authenticated and legally binding.
What information is included in the ALTA Explained Settlement Statement?
The ALTA Explained Settlement Statement includes various sections detailing the financial and personal information of the parties involved. Key sections include:
- Details on the Participants: Names of the buyer, seller, escrow officer, and lender, along with transaction-specific information like escrow file number and print date.
- Financial Breakdown: Lists all costs and fees, such as the sales price, personal property costs, deposit, loan amount, and prorations for taxes and HOA dues.
- Loan Charges: Itemizes fees associated with obtaining a mortgage, including points, application fees, origination fees, and insurance premiums.
- Title Charges & Escrow/Settlement Charges: Covers expenses related to title insurance, title search, and settlement fees. This comprehensive document ensures all parties are aware of their financial commitments and helps facilitate a smooth closing process.
