Net loan proceeds is a debit to which party?

Net loan proceeds is a debit to which party?

• A. Broker
• B. Buyer
• C. Seller
• D. Lender

Answer: (A)

Net loan proceeds are the funds the lender is disbursing to help complete the purchase, flowing through the closing with the costs and payoffs allocated from that pool. In many Colorado closings, the broker’s commission is paid out of those loan funds. Because those loan proceeds are being used to cover the broker’s compensation, the broker’s ledger is affected as a charge against them at the closing. That makes net loan proceeds appear as a debit to the broker—the broker is receiving less from the loan funds because part of it is allocated to commissions and related costs. In short, the loan proceeds are money coming from the lender to fund the transaction, but when tied to the broker’s compensation, they show up as a debit against the broker’s portion on the closing statement.

Net loan proceeds are the funds the lender is disbursing to help complete the purchase, flowing through the closing with the costs and payoffs allocated from that pool. In many Colorado closings, the broker’s commission is paid out of those loan funds. Because those loan proceeds are being used to cover the broker’s compensation, the broker’s ledger is affected as a charge against them at the closing. That makes net loan proceeds appear as a debit to the broker—the broker is receiving less from the loan funds because part of it is allocated to commissions and related costs.

In short, the loan proceeds are money coming from the lender to fund the transaction, but when tied to the broker’s compensation, they show up as a debit against the broker’s portion on the closing statement.