Financing, Closing, and Settlement
The financing layer
A loan is evidenced by a promissory note (the promise to pay) and secured by a deed of trust or mortgage. Arizona lenders typically use deeds of trust, which allow non-judicial foreclosure through a trustee's sale after statutory notice. Loan-to-value drives private mortgage insurance on conventional loans, mortgage insurance premium on FHA loans, and the funding fee on VA loans. PITI stands for principal, interest, taxes, and insurance.
Consumer lending rules
TRID requires the Loan Estimate within three business days of application and the Closing Disclosure at least three business days before consummation; a changed APR can require re-disclosure. RESPA Section 8 prohibits kickbacks and unearned fee splits for referrals, and affiliated business arrangements require disclosure.
Arizona closing customs
Closings are handled by escrow and title companies rather than attorneys. By custom the seller pays the owner's title policy and the buyer pays the lender's policy; escrow fees are commonly split. An Affidavit of Property Value is filed with the county recorder on most sales.
Distress
Arizona's anti-deficiency statute protects borrowers on purchase-money residential loans after a trustee's sale; it generally does not protect refinances, home equity lines, or non-residential loans. A short sale requires lender consent; a deed in lieu transfers title without a sale.
Traps
Confusing Loan Estimate and Closing Disclosure timing. Assuming all loans are assumable. Assuming anti-deficiency applies to every homeowner. Forgetting that prorations of taxes and interest are settlement adjustments, not price changes.
Rule of thumb: three business days for both the Loan Estimate (from application) and the Closing Disclosure (before consummation).