HUD-1 Settlement Statement

A few days before the closing, you will receive a document known as HUD-1 Settlement Statement from your lender. This document contains important information about the closing and also helps you prepare for the day.

How can HUD-1 Settlement Statement help you prepare for the closing?

The document contains a section that compares the charges on the Good Faith Estimate to the actual charges you are going to pay at the closing. Your lender must offer the GFE within three days of application, providing you an itemized list of the estimated closing costs and other fees.

Each item on the GFE also has upper and lower limits of charges, and the final cost must fall within these two extremes. The HUD-1 document allows you to compare the actual charges with these estimated charges, and help you verify that the actual charges remain within the allowable limits of the GFE.

What if I find the actual costs higher than the estimates?

The closing costs are typically between 3 percent and 7 percent. The HUD-1 Settlement Statement exists to let you know the actual costs of the settlement, which must not be much higher than the estimates on the Good Faith Estimate. If you find any discrepancies between these two documents, you have every right to ask your lender and get the mistakes corrected.

What other information can I find on the HUD-1 Settlement Statement?

Besides information on the actual amounts you will pay for the various fees and services associated with the closing of your mortgage loan, you will find important information about the date and time of the closing. It is mandatory for the lender to send you this document at least a day before the closing. You may want to do a final-walkthrough of the property you are going to buy before you can close on the mortgage loan.

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