HUD Settlement Statement
Click here for an example: Example HUD in PDF format
Updated: 02/25/2008
When explaining a HUD Settlement Statement, I prefer to start with page two and work my way forward. Page two provides the itemization of individual charges, whereas the first page provides the final summary of all fees combined. The HUD Settlement Statement is broken down into sections, grouped usually by who is charging the fee with two columns - one for the buyer's fees and one for the seller's fees. Please keep in mind that this explanation is simply my interpretation and is not explained the same by all Closers.
Page 2, 700 Section - Commissions - This shows the total commission paid by the seller and reflects which real estate agent is holding the earnest money, if applicable. This section may also include the Home Warranty if one is being purchased.
Page 2, 800 Section - Lender/Mortgage Fees - This section collects the fees payable to the lender and to the mortgage broker. This is also where the lender and broker will disclose compensation that is paid between the two of them, if any. Any fee that has been paid in advance will be reflected as a POC item meaning Paid Outside Closing.
Page 2, 900 Section - Interest & Insurance - Depending on the type of loan you get you may pay daily interest on your new loan. Monthly payments do not apply principal and interest for the same exact month. Principal is paid for the existing month while the interest is paid for the prior month. For example: if you close in April, your first payment will not be due until June. Therefore your June payment will include principal for June and the interest from May. Typically, interest is collected from the date that the loan is funded (refinances require a 3 day waiting period) until the end of the month. Remember, this is not the case for all loans.
Page 2, 1000 Section - Escrows - If applicable, your lender will collect several months of insurance, county taxes and if applicable city taxes to establish your Escrow Account. The amount collected is based upon the due date of the next annual payment that the lender will be required to pay. Lenders typically prefer to have one or two months cushion to allow for possible adjustments to annual premiums and tax amounts.
Page 2, 1100 Section - Title Charges - These charges are directly related to the title company for services provided, title insurance and reimbursement for charges incurred. Title Insurance rates in Knox County are set by the insurance underwriters and are based upon the loan amount or sales price if purchasing Owner's Title Insurance.
Page 2, 1200 Section - Recording Fees - The county registers office will charge a recording fee based upon the number of pages being recorded and will collect tax based on the sales price and amount of money borrowed, if any. These fees are the same throughout the State.
Page 2, 1300 - The section will collect any additional bills, expenses or charges that need to be paid.
Page 2, 1400 - This is the subtotal from each column to the buyer and seller and is carried forward to page one for the gross total summary.
Page 1, Buyers side - Items in the 100 section are added to the total gross amount due. Section 200 are deductions from the gross amount due with the balance shown on line 303 which is the amount due from the buyer at closing. Funds must be a cashiers check, wire or other Good Funds as described in the Good Funds Act.
Page 1, Sellers side - Items in the 400 section are amounts due to the seller and added to the sales price. Items in the 500 section are deductions from the gross amount due with the balance shown in line 603 which is the amount of the sales proceeds provided to the seller at closing. If purchasing another home at another title company, Sellers must convert their check into a cashiers check prior to their next closing as required by the Good Funds Act. We can send a wire, however, there may be a small charge incurred and we can not guarantee when the funds will be received by the next title company.