How does appraisal cost usually appear in the Closing Disclosure when a new institutional mortgage has been used for the purchase?

How does appraisal cost usually appear in the Closing Disclosure when a new institutional mortgage has been used for the purchase?

• A. POC
• B. Paid at Closing
• C. Lender Credit
• D. Prorated

Answer: (A)

In the Closing Disclosure, charges labeled as Paid Outside Closing (POC) are those paid before the closing or outside of the settlement funds. When a new institutional mortgage is being used to purchase, the lender typically orders and pays for the appraisal early in the loan process. The appraisal fee is usually settled before the closing date, either directly to the appraiser or through the lender, rather than being funded from the closing funds. That’s why the appraisal cost most often appears as POC. It isn’t a payment made at closing from the borrower’s closing funds, nor is it a lender credit or a prorated cost.

In the Closing Disclosure, charges labeled as Paid Outside Closing (POC) are those paid before the closing or outside of the settlement funds. When a new institutional mortgage is being used to purchase, the lender typically orders and pays for the appraisal early in the loan process. The appraisal fee is usually settled before the closing date, either directly to the appraiser or through the lender, rather than being funded from the closing funds. That’s why the appraisal cost most often appears as POC. It isn’t a payment made at closing from the borrower’s closing funds, nor is it a lender credit or a prorated cost.