Understanding Closing Statements in West Virginia Mortgage Law

John must provide a closing statement to both the Barkers and Hannah, which must include all of the following information, EXCEPT:

• A. A list of all costs and fees
• B. Finance charge rate per year
• C. Names of servicers to which servicing may be transferred
• D. Principal and total of payments

Answer: (A)

The requirement for a closing statement to include a detailed list of all costs and fees is actually a crucial part of the disclosure process during a real estate transaction. This list helps both buyers and sellers to understand the financial implications of the mortgage and ensures transparency regarding all expenses involved, which include things like origination fees, appraisal fees, and other closing costs. The finance charge rate per year is also a critical component of the closing statement that helps borrowers understand the cost of borrowing over time and the total interest they will pay on the loan. Additionally, disclosing the names of servicers to which servicing may be transferred is part of the Mortgage Disclosure Improvement Act (MDIA). It informs borrowers of potential changes in service providers that could affect their payments. Finally, the principal and total of payments provide borrowers with essential information regarding the total amount they will pay over the life of the loan, including principal and interest. Since A is a crucial component that should be included in the closing statement, it is not correct that this would be omitted in the required information provided to the Barkers and Hannah.

When it comes to navigating the maze that is mortgage transactions in West Virginia, understanding closing statements is crucial—and, quite frankly, a bit overwhelming at times, right? Think of the closing statement as your financial playbook; it lays everything out clearly so you know what you're signing up for. Let's break down what you need to know about the closing statement process, especially the key components that the law mandates must be included, and let's make sense of why each part matters.

So, you might be asking yourself: What exactly should be on this crucial document? Well, the expectations are quite set. One of the first elements that need to be specified is the finance charge rate per year. This number is more than just a figure; it’s like the heartbeat of your mortgage. Knowing your annual finance charge helps potential borrowers understand how much interest they’ll accrue over time, which can affect everything from monthly payments to the long-term cost of the loan itself. Don’t you want to ensure you’re not signing up for a rate that feels like a financial handcuff?

Then, onto the names of servicers to which servicing may be transferred. Wait, what does that even mean? Well, you see, when you take out a mortgage, your loan can be sold off or transferred to another company. This is pretty standard in the industry, so having that information upfront can save you some headaches down the road. Wouldn’t it be better to be prepared for any changes rather than being blindsided later?

Now, let’s talk about the principal and total of payments. This portion provides a comprehensive look at how much you’re actually paying, including both principal and interest. Knowing the full scope of what you'll be dishing out over the term of the loan is essential. It’s like keeping tabs on your spending—it makes budgeting so much more manageable!

Here’s where things get a bit tricky. Although you might think that listing a detailed list of all costs and fees seems like it should be included, the truth is it’s not required to be disclosed in the same way as those other items. Crazy, right? A breakdown of all those little costs—like origination fees, appraisal fees, or even title insurance charges—helps both buyers and sellers fully understand the financial implications, but it’s not a legal requirement on the closing statement itself. Fascinating how legal definitions shape the way we view important documents, isn’t it?

Knowing what needs to be present in a closing statement can empower you during your real estate journey. So why leave any stone unturned? Make sure to keep these critical pieces of information in mind as you prepare for closing day.

You know what? It’s all about transparency, trust, and ensuring that you’re making informed choices. After all, isn’t that the kind of partnership you want with your financial future? So, as you study for that West Virginia mortgage law test, remember these essential elements—they’re not just words; they’re the keys to a confident buying experience.