Final answer:
The term that fits in the blank is 'seller's settlement statement', which is related to the expenses involved in a home sale. Mortgages often require a down payment, standardly 20%, but lower down payment options exist which necessitate mortgage insurance. Escrow serves to streamline the payment of home insurance and property taxes by incorporating them into the monthly mortgage payment.
Step-by-step explanation:
The blank in the question can be filled with the term seller's settlement statement or Hud-1 Settlement Statement, which details the fees associated with a home sale. When buying a home, the buyer typically takes out a mortgage, which is a line of credit used to purchase the property. A common guideline is to make a 20% down payment on the home's purchase price. For example, on a $100,000 home, you would pay $20,000 upfront and borrow the remaining $80,000.
There are options for smaller down payments, such as 0-3.5%, but these usually require the buyer to purchase mortgage insurance, an added cost that protects the lender in case the buyer defaults on the loan. This insurance is part of the mortgage and increases the total amount paid over time.
Additionally, Escrow plays an important role in homeownership, acting as a neutral third party to handle the homeowner's insurance and property taxes. Rather than managing separate payments for these bills, they can be included in the monthly mortgage payment through escrow, simplifying the process for the homeowner.