HUD-1 Settlement Statement

Printable version of the HUD-1 Settlement Statement

The HUD-1 Settlement Statement summarizes all the costs and adjustments for the buyer and the seller in a home purchase or for just the borrower in a refinance.

This form is furnished at closing to give you a statement of actual costs that you'll expect to pay. Your statement may include the information from the seller's transaction summary, but it's not required. Your settlement agent should take the time to explain each and every item on this form to you.

Earlier in this section we introduced you to the Good Faith Estimate. It's important for you to recognize that the line item numbers of the Good Faith Estimate correspond directly with the line item numbers on the HUD-1 Settlement Statement. The purpose is to allow you to compare what you were told to what you will pay.

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Section J is the summary of the borrower's side of the transaction.

• HUD 100-120
• HUD 200-220
• HUD 300

Section K is the summary of the seller's side of the transaction.

• HUD 400-420
• HUD 500-520
• HUD 600

The Good Faith Estimate that you received at the beginning of the process is just that - an estimate. The HUD-1 settlement statement, which you'll receive at the closing, will show you the actual cost for items paid at settlement.

Be sure to bring the Good Faith Estimate with you to the closing to compare the costs on the HUD-1 Settlement Statement. Most consumers don't realize the importance of comparing these two documents.

The GFE and the HUD-1 are part of a disclosure package intended to help protect you, the consumer, from unexpected changes in cost.

Now let's look at an example. Again, note that the line items on the GFE can be compared to the line items on the HUD-1.

GFE Line Item 801: Loan origination fee $2,000 Line Item 902 Mortgage Insurance Premium $1,000 Line Item 1001: Hazard Insurance Premiums $300 Line Item 1101: Closing or Escrow Fee $300 Line Item 1201 Recording Fees $25 Line Item 1302 Pest inspection $200		HUD-1 Line Item 801: Loan origination fee $2,000 Line Item 902 Mortgage Insurance Premium $1,000 Line Item 1001: Hazard Insurance Premiums $300 Line Item 1101: Closing or Escrow Fee $300 Line Item 1201 Recording Fees $25 Line Item 1302 Pest inspection $200
What you'll want to watch for are unexpected and unexplained fees. Take a look at this next example:
Line Item 801: Loan origination fee $2,000		Line Item 801: Loan origination fee $2,500

On this Good Faith Estimate, line item 801 lists a loan origination fee of $2,000. However the HUD-1 Settlement Statement lists $2,500 - a difference of $500! You have the right to know why you are being asked to pay $500 more than what you were initially quoted. Insist on an explanation as to the difference. You are never required to accept a loan that is different from what you expected. There should be no surprises at this late date. If the fees are substantially different, don't sign any documents unless you agree with the new terms.

Remember, the decisions you make at this point may be with you for the life of the loan. Even at this late date you can negotiate terms or seek advice from your realtor, an attorney, or your local housing authority in making a final decision. The bottom line is the final decision lies with you.

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