Finance and Settlement
Finance and Settlement
This domain covers how a Georgia transaction is financed and closed: loan underwriting, federal disclosure timing, and Georgia's closing and tax rules. Expect math on loan-to-value, closing costs, and transfer taxes.
Financing basics
Lenders qualify borrowers on PITI-principal, interest, taxes, and insurance-plus other debts. Loan-to-value is loan amount divided by appraised value or purchase price, whichever is lower. Private mortgage insurance is commonly required above 80% LTV. Discount points are prepaid interest; origination fees are lender charges. Amortization spreads principal and interest over the term.
Federal disclosures
RESPA Section 8, 12 U.S.C. § 2607, prohibits fees for referrals of settlement business. Under TRID, 12 C.F.R. § 1026.19, the Loan Estimate must be delivered within three business days after application, and the Closing Disclosure at least three business days before consummation. Lender-controlled fees have zero tolerance; other categories have 10% cumulative or unlimited tolerances.
Georgia closing and taxes
Georgia is an attorney-closing state: a licensed attorney conducts or supervises the closing. Georgia real estate transfer tax is $1 per $1,000 of consideration, rounded up, customarily paid by the seller. The intangible recording tax on a mortgage is $1.50 per $500 of indebtedness, rounded up, customarily paid by the borrower.
Worked example
Price $250,000; new loan $200,000. Transfer tax: $250,000 ÷ $1,000 = 250 increments × $1 = $250. Intangible tax: $200,000 ÷ $500 = 400 increments × $1.50 = $600. If the price were $250,400, the transfer tax would still be $251 because the tax rounds up to the next $1,000.
Traps
Charging the buyer the transfer tax by default; confusing transfer tax with the intangible recording tax; calculating the intangible tax on the purchase price rather than the loan; missing the three-business-day Closing Disclosure rule; treating a referral fee as harmless.