Understanding a HUD Settlement Statement
As soon as most home buyers see the pile of paperwork that comes during the closing process, they are even more thankful for their real estate attorney. There are so many papers to sign, inspections to do, and pages to understand when purchasing a home. Perhaps that is why the state of Massachusetts made it a law that a closing attorney be present at all real estate closings. The HUD Settlement Statement is just one of those documents that could be included in that pile of papers. Here are a few common questions about the HUD-1 Statement.
What is the HUD-1 Statement?
The HUD-1 Statement is used any time a real estate transaction in the United States involves any sort of federal funding. This is set forth in the Real Estate Settlement Procedures Act or RESPA. All of the charges that will be imposed on both the buyer and the seller in a real estate transaction are listed in the HUD-1 Statement. This would include all fees that are a part of the closing process, but are paid before closing. The HUD-1 Statement gives the buyer and seller a list of all of their payments and profits from the sale in a line item list.
Layout of the HUD-1 Statement
The type of loan which the HUD-1 Statement applies to is laid out on page one. This could be an FHA (Federal Housing Association) loan, a VA (Veterans Association) loan, or other federally funded loan. Page one also names the Buyer or Borrower, the Lender, and the Seller of the property. The location’s property and the Settlement Agent will also be listed on page 1 of the HUD-1 Statement, as well as a summary of the sale. The Buyer’s list will be on the left of the page, and the Seller’s list will be on the right. On the second page of the HUD-1 Settlement statement, various settlement charges will be listed. Like the first page, the Buyer’s list will be on the left, and the Seller’s on the right. This would include costs such as mortgage insurance, interest, etc.
The HUD-1 Statement can also be used for a refinancing of a federal loan. In those cases the Seller’s side of the paper would remain blank, since there is no seller. It is a good idea to have your closing attorney look over the HUD-1 Statement to make sure that no mistakes or mistypes were made when it was drawn up.
If you have a question about your HUD-1 Statement, or any other real estate issue, give us a call today.