An HUD-1 Statement settlement provides a list of all the closing expenses and credits included in a real estate transaction. An HUD-1 Settlement statement is similar to a closing disclosure in nature, but it is provided to the buyer one day before closing the sale.
This legal documentation presents an organized list of all the expenses involved in a real estate transaction. From this document, the buyer gets to know how much money they will have to pay in total for obtaining ownership of a property.
The use of an HUD-1 settlement statement is limited these days; however, in specific cases, it is an essential legal document and of great importance for both parties involved in a transaction.
An HUD-1 Settlement Statement is a standardized mortgage lending document with three elaborative pages. This document includes all the charges and credits applied to the buyer and the seller in real estate settlements.
The HUD-1 Settlement Statement is one of the final pieces of documentation at the end of a mortgage settlement. This legal document has three pages, each containing important information about the mortgage settlement.
The document first page includes the involved parties name, addresses, and other information relevant to the transaction. The second page of the settlement offers a comparison between the buyer early loan estimates, and the third page of the documentation includes the flowing information:
ü Commission fees offered to real estate agents.
ü Loan charges, appraisal costs, payments for tax services, flood certification, reports et cetera.
ü Advance payments that a buyer makes for per diem interest, mortgage and homeowners insurance.
ü Charges for government recording services.
ü Fees for title services and insurance.
ü Home inspection charges
ü Title insurance policy premium
ü Notary charges
An HUD-1 used to be an essential document while making any real estate transactions. However, the use of this document has been limited to specific transactions only. Mortgages that require the use of an HUD-1 settlement statement in modern times are:
Reverse Mortgage: Reverse mortgage is a type of loan suitable for individuals aged 62 years or older.
Refinance: An HUD-1 is one essential document if a buyer is refinancing. Refinancing is replacing an existing mortgage with a new one with more favorable terms.
Thus, the use of an HUD-1 settlement statement is still relevant in the modern days when making real estate transactions.
