If you are about to purchase or refinance a home, then you will be faced with the task of reading and understanding a HUD-1 Settlement Statement. A HUD-1 Settlement Statement is provided by a mortgage lender or broker as required by the Real Estate Settlement Procedures Act (RESPA).The HUD-1 itemizes the costs and fees associated with the financing of a property, and it’s important that a buyer carefully review the Boca Raton architects for accuracy and fairness. Like a tax form or any other government document, the HUD-1 Settlement Statement features a variety of sections that are of importance to buyers and sellers.
There are 12 sections on the form as required by law, some of which contain sub-sections and additional line items. One of the best ways to better understand the HUD-1 Settlement Statement form is to look at it section by section.
To do that, here is a short summary of some of the most important sections that buyers and sellers should be aware of on the HUD-1 Settlement Statement form: HUD-1 Sections A, B, C, D, E, F, G, H and I.
Sections A through I are very general. They contain basic information about the type of loan being used to pay for the property, as well as personal information (e.g., addresses, date of transaction, location of the property, etc.). When reading a HUD-1 Settlement Statement, it is important to verify that the names and addresses on the form are complete and accurate.
HUD-1 Section J
Section J on a HUD-1 Settlement Statement contains details and information that pertain primarily to the borrower. The borrower’s costs, credits, and net amount owed for the purchase of the property are carefully outlined in section J. The following sub-sections related to the borrower’s responsibilities are important parts of Section J: 100.
Gross Amount Due from Borrower: This line contains the amount that the borrower owes. The amount owed is determined by the price of the property, fees, settlement charges, taxes that were prepaid by the seller, and any extra items on the property (e.g., appliances). Section J: 200.
Amounts Paid or On Behalf of Borrower: This line contains any money that has already been put toward the purchase of the property by the borrower. Any deposit, financing, or money that the seller owes (e.g., unpaid taxes, repair costs, etc.) will be calculated into the total amount on this line. Section J: 300.
Cash at Settlement from/to Borrower: This line contains the actual amount of cash that the borrower must have in hand at the time of settlement.
Section J is important on the HUD-1 Settlement Statement because it serves as the balance and checkpoint for any money owned by the borrower, any credits toward the borrower’s balance, and any money that the seller might still be responsible for. Review this section carefully.