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HUD-1 Settlement Statement

The "HUD-1" is also know as the settlement statement. This is the final accounting of all the costs and credits associated with the successful completion of any mortgage process (either refinance or purchase). This document indicates how much money the borrower will be bringing to closing (always certified funds). Your mortgage consultant should review this document with you prior to closing. Settlement costs are commonly called "closing costs" (though "settlement costs" is a more accurate name).

Often a source of confusion, it's *really* important to understand everything on the HUD-1 form. We've included some information below that should help greatly. DO NOT be afraid to ask your loan officer or REALTOR® for help if there is something on the HUD-1 that you don't understand.

Understanding the HUD-1 Settlement Statement Form

Calculating the Amount You Need at Settlement

The first page of the HUD-1 Settlement Statement summarizes all the costs and adjustments for the borrower and seller.

Section J is the summary of the borrower’s side of the transaction and Section K is the summary of the seller’s side of the transaction.

You may receive a copy of the seller’s side, but it is not required.

SUMMARY OF BORROWER'S TRANSACTION

Section 100 summarizes the borrower’s costs, such as the contract cost of the house, any personal property being purchased, and the total settlement charges owed by the borrower from Section L.

Beginning at line 106, adjustments are made for items (such as taxes, assessments, fuel) that the seller has previously paid.

If the buyer will benefit from these items after settlement, the buyer will usually repay the seller for that portion of the cost.

Here is an example of HUD Statement calculations:

J. SUMMARY OF BORROWER'S TRANSACTION
100. GROSS AMOUNT DUE FROM BORROWER:
101. Contract sales price 150,000.00
102. Personal Property  
103. Settlement charges to borrower (line 1400) 3,000.00
104.  
105.  
Adjustments for items paid by seller in advance
106. City/town taxes to  
107. County taxes to  
108. Assessments 6/30 to 7/31 (owners assn.) 40.00
109.  
110.  
111.  
112.  
120. GROSS AMOUNT DUE FROM BORROWER 153,040.00

 

In this example, the cost of the house is $150,000 and the borrower’s total settlement charges brought from Line 1400 of Section L are $3,000. We're going to use a settlement date of July 1.

The borrower has agreed to pay the seller for the $40 Home Owners Association (Line 108) dues that have been paid for the month of July.

This is totaled for a gross amount due from the borrower of $153,040.

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Panama City Home Sales

Panama City Beach Realty Group
Counts Real Estate Group, Inc.
3009 Highway 77, Suite H
Panama City, Florida 32405
Direct: 850.774.6582
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