What document details all financial transactions at closing?

What document details all financial transactions at closing?

• A. Closing Disclosure
• B. Settlement Statement
• C. Financial Ledger
• D. Closing Agreement

Answer: (B)

The Settlement Statement is the document that provides a comprehensive breakdown of all financial transactions that occur at the closing of a real estate transaction. It outlines the details of the sale, including the purchase price, adjustments, credits, and debits for both the buyer and the seller. This statement ensures transparency by itemizing all costs associated with the transaction, such as loan fees, title insurance, inspections, and property taxes. By consolidating all financial aspects in one document, the Settlement Statement serves as an important tool for both parties to verify that they understand and agree to the financial obligations being fulfilled at the closing. Its detailed nature helps to prevent misunderstandings or disputes about what costs are being paid at closing and ensures that all necessary payments are accounted for. In contrast, while the Closing Disclosure also outlines financial terms and is a key document used in many transactions, it is specifically designed for loan transactions governed by the TILA-RESPA Integrated Disclosure rule. Other options like the Financial Ledger or Closing Agreement do not exist as recognized documents specifically governing the closing financial transactions in real estate. Thus, the Settlement Statement is essential for clearly presenting the financial information necessary for a successful closing.

The Settlement Statement is the document that provides a comprehensive breakdown of all financial transactions that occur at the closing of a real estate transaction. It outlines the details of the sale, including the purchase price, adjustments, credits, and debits for both the buyer and the seller. This statement ensures transparency by itemizing all costs associated with the transaction, such as loan fees, title insurance, inspections, and property taxes.

By consolidating all financial aspects in one document, the Settlement Statement serves as an important tool for both parties to verify that they understand and agree to the financial obligations being fulfilled at the closing. Its detailed nature helps to prevent misunderstandings or disputes about what costs are being paid at closing and ensures that all necessary payments are accounted for.

In contrast, while the Closing Disclosure also outlines financial terms and is a key document used in many transactions, it is specifically designed for loan transactions governed by the TILA-RESPA Integrated Disclosure rule. Other options like the Financial Ledger or Closing Agreement do not exist as recognized documents specifically governing the closing financial transactions in real estate. Thus, the Settlement Statement is essential for clearly presenting the financial information necessary for a successful closing.