The HUD-1 Settlement Statement

The HUD-1, also known as the settlement statement, is a prescribed form from the U.S. Department of Housing and Urban Development (HUD). This form itemizes all charges imposed on the borrower and all charges imposed on the seller in connection with the settlement of your real estate transaction.

I personally think that the form that became required in January 2010 is a little more cnfusing for most people. It gives subtotals in one area that are then posted as totals in other areas. Unfortunately the folks in Washington have decided that this is best for you so you're stuck with it. Your loan officer should be able to reveiw this document with you and give you a through explanation of it's contents.

Several days before the closing our closing department will email the information pertaining to your mortgage and costs to the title company. The title company will then add those costs related to the seller, real estate companies, municipalities, and any other interested parties. Once completed, the title company sends us a copy of the HUD-1 statement with all the costs itemized. We will review those costs and if they seem correct, we will call you with the total amount that you will need to bring to closing.

Remember: Funds brought to closing must be in the form of cashiers checks or certified funds.

You have the right to inspect your HUD-1 Settlement Statement and we will make every effort to provide you with that prior to the closing. Be sure to tell the closer that you would like a copy of this document before closing.

While we cannot know all of the costs pertaining to the transaction sometimes there are charges assessed by parties involved in the transaction that are out of the ordinary or not customary. In those cases it's best to contact your real estate agent or attorney so that they can work those charges out with the seller's agent or the party assessing the charges.

You'll want to keep a copy of your HUD-1 for when you do your income taxes. There may be items paid at closing that are tax deductible that will only show on the HUD-1. Check with your tax preparer for items on the HUD-1 that you can claim as a deduction.