Whether you're buying, selling or refinancing your home, you'll need a real estate lawyer or notary to help you complete your paperwork and facilitate the financial transaction.
On closing day you will sit down with your lawyer to make sure everything is done, and you'll walk out with a statement that shows you exactly how your money was moved around in the process.
A statement of adjustments isn't complicated as it might seem; it's actually similar to your monthly bank statement, as it has a list of various debits and credits with a balance at the end. In the buyer's statement of adjustments, the debits represent amounts already paid, such as the deposit, while the credits include the purchase price of the home and any fees or utilities the seller has prepaid. The total amount in the credits column (purchase price+prepaid items) minus what's in the debit column (the deposit) is what you owe to the seller on cloding day.
Once the full amount you owe to the seller is determined, it is moved over to the buyer's trust ledger statement. A trust ledger statement is essentially a record of all of the money moved around on closing day, and it's setup looks similar to the statement of adjustments, with a debits column and a credits colums. The credits column includes the mortgage loan amount being advanced by your lender, as well as the rest of your down payment. The debits column lists where all of that money is going on closing day, including how much the seller must be paid, as well as the land transfer tax, title insurance, legal fees and disbursements, plus any other fees that might be payable.
|Courtesy of RateHub.Ca|