settlement statement or hud 1 - The settlement statement or hud 1 is a doument that you recieve at the loan closing it will tell you where every penny of the transaction has gone. it will lay out all the fees and will break them down in detail. it will also show what is being paid off and how much, it will also tell you of any cash you will recieve or have to bring to the closing.On page 2 you will notice numbers on the left-hand side of the page. Those numbers coincide with the numbers on your Good Faith Estimate provided to you from your Mortgage Broker. These numbers represent how much you are paying to each party in the transaction for example Title Company (Or Closing Attorney) fees, Broker Fees, Lender Fees and other miscellaneous fees.
The front page of the Hud 1 shows a summary of all the debits and credits. Page 2 breaks down the detail of all the fees associated.
The settlement statement is an important document that should be kept by the borrower for future reference. Borrowers would be wise to show the document to their tax preparer as many charges shown on the statement are tax deductable. Also if the borrower refinances the property in the future, the new lender may want to see that settlement statement before approving the new loan.
The HUD-1 is a form used by the settlement agent (also called the closing agent) to itemize all charges imposed upon a borrower and seller for a real estate transaction. It gives each party a complete list of their incoming and outgoing funds.
The HUD 1 should be carefully scrutinized to ensure correctness by both buyer/borrower and seller. This will help make sure everyone is paying or receiving all items agreed upon in the purchase agreement and/or loan transaction.
