Understanding the HUD-1 Statement

Posted on: August 4th, 2014

By Stephanie Lococo, Title Closer at Global American Title Agency, Inc.

Understanding the HUD-1 Statement
There are many steps and details involved when purchasing or selling a home. For first time buyers and seller you may feel excited, happy, but also a little overwhelmed. When it comes time for settlement all those steps and details are recorded so that all parties can see what transactions have taken place, monies owed to and from each party, and the agreements made by the lender, buyer, and seller. The HUD-1 Statement is used during the real estate transaction to itemize all these charges and give each party a complete list of their incoming and outgoing funds.

This standard real estate settlement form is used in all transactions within the United States that involve mortgage loans. Although the HUD-1 Statement is not required for cash transaction it’s commonly used for all transactions as standard practice.

Who prepares the HUD-1 Statement?
The HUD-1 Statement can be prepared by the title company closing the transaction or in attorney states by the attorney closing the transaction. It is prepared by obtaining fees from the lender, title company, and seller’s or buyer’s attorneys office. Any other fees received at closing can be added at that time. The parties involved will receive a copy at closing.

What if my information is incorrect on the HUD-1?
Changes to a HUD-1 can be made within 30 days of settlement.

How to read a HUD-1?
The HUD-1 Statement can be a bit overwhelming, so be sure to ask questions so that you understand all the details. The form is broken down into sections and numbered within each section. Start by looking at the top of page 2 and work your way down section by section. This way you will see how the fees are totaled on the bottom and then that number is then shown again on the top of page 1.

The top section of page 2 includes lender charges, the middle title charges, and the bottom section details recording and additional charges. Page 1 then breaks down into two sections, credits and debits, which are subtracted to give you the bottom line. The top section includes credits to the seller (which can include anything from pd upfront by seller to assessments usually) and the total from page 2. The bottom section includes credits to the buyer (which includes the loan amount from the lender, earnest money deposit and tax prorations).

Have more questions? Contact Global American Title Agency, Inc. at info@globaltitle.com.