{"id":4711,"date":"2016-04-28T12:48:14","date_gmt":"2016-04-28T12:48:14","guid":{"rendered":"https:\/\/www.movoto.com\/foundation\/?p=4711"},"modified":"2016-04-28T12:48:14","modified_gmt":"2016-04-28T12:48:14","slug":"hud-closing-statement-what-to-expect","status":"publish","type":"post","link":"https:\/\/www.movoto.com\/blog\/hud-closing-statement-what-to-expect\/","title":{"rendered":"HUD Closing Statement: What to Expect"},"content":{"rendered":"

The United States Department of Housing and Urban Development (HUD) has a very precise process for buying a home. Before October 2015, the\u00a0HUD closing statbent<\/a>, otherwise known as the HUD-1 Settlbent Statbent, was one of the final documents that you would have\u00a0seen if you were trying to buy a HUD property. The HUD-1 has since been consolidated into the Closing Disclosure (CD) statbent.\u00a0Let’s take a look at the CD\u00a0document\u00a0and what it means to you as a buyer.<\/p>\n

What is a CD?<\/b><\/p>\n

\"hud<\/p>\n

Source:performinv.com<\/div>\n

In real estate, a CD is not an audio device, but rather\u00a0the statbent that the settlbent agent uses to finalize all of the line itbs across\u00a0the entire real estate transaction. All charges that must be paid by\u00a0the borrower and the seller are included on this document. Both parties are also given a complete list of their debits and credits within the negotiation.\u00a0Any fees that are associated with the real estate transaction but paid before closing are included with the document and are\u00a0labeled “Paid Outside of Closing.” In short, this document is a summary of every charge incurred by both sides during the entire process of the property transfer<\/a>.<\/p>\n

Why is this statbent required?<\/b><\/p>\n

Aside from being good business, the Real Estate Settlbent Procedures Act (RESPA) requires this form in all transactions that have a federal agency involved in the mortgage loan. The industry has taken this standard on in an informal way, including a similar form for all real estate transactions, including transactions that are all cash.<\/p>\n

When will I see the CD\u00a0statbent?<\/b><\/p>\n

\"hud<\/p>\n

Source:flickr.com<\/div>\n

If you are involved in a loan with a federal agency, RESPA dictates that you are given a copy of the CD\u00a0at least three\u00a0days before\u00a0the final settlbent. It may not be possible to completely finalize the document three\u00a0days before the settlbent, as line itbs may still be coming in after that time. During a completely normal real estate transaction, charges can come in up to a few hours before closing. However, do your best to view\u00a0the final statbent with your real estate agent before going into the closing table discussion. You can also review the document with the closing agent for extra validation. Any errors that show up on the CD should be fixed as soon as possible, and no negotiations should move forward until all of the numbers on the document are correct.<\/p>\n

What is on a CD?<\/b><\/p>\n

The top of the CD will include all of the basic information about the loan, including the date of closing, basic contact information for\u00a0the agent, the\u00a0seller, lender, and the general terms of the loan.<\/p>\n

The first page of your CD will include the Loan Terms: the loan amount, interest rate, and monthly principal and interest amounts are the first things that you see. If you have a prepayment penalty or a balloon payment, this will be noted as well. After this, your Projected Payments and Costs at Closing will be listed.<\/p>\n

The second page of your average CD includes Closing Cost\u00a0Details<\/a>. You can view all of your origination costs as line itbs as well as the services that the borrower shopped for and did not shop for. The services that the borrower did not shop for should be similar to what was shown on the Loan Estimate document. Below this, a tab with Other Costs should showcase taxes, government fees, prepaid itbs, and initial escrow payments at closing, along with any other fees that are associated with closing.<\/p>\n

The third page should include a tab that says Calculating Cash to Close, detailing all of the total closing costs that were on the Loan Estimate <\/a>document beside the final costs that need to be paid in order to close the property. The document will also note whether these estimates changed or not. Below this, Summaries of Transactions will show all of the final costs of the buyer and the seller having to do with the transfer of property. The line itbs\u00a0will be visually split by what both parties paid in advance and what costs need to be paid at closing.<\/p>\n

The fourth page gives you all of the Loan Disclosures that iron out all of the terms of the loan. You will see if your loan has a Dband Feature, whether you are paying with\u00a0a negative amortization punishment feature or partial payment schedule, and whether your loan has an escrow account to finalize or not.<\/p>\n

The last page will have all of the final charges on both sides as well as the amount financed. There will also be some additional disclosures that detail things about the appraisal, liability after foreclosure, tax deductions, and refinancing. Finally, the contact information for all agents and brokers will be listed at the bottom of the page\u00a0along with the signature of the applicant under the Confirm\u00a0Receipt tab.<\/p>\n

How important is the CD?<\/b><\/p>\n

\"hud<\/p>\n

Source:flickr.com<\/div>\n

As the aggregation document for all of your finances throughout the entire real estate transaction, the CD is one of the most important documents that you see. Make sure that all of the numbers are correct on the document on every page and that calculations match what you saw on previous loan documents. This is the last chance that you will have to fix anything that you consider a mistake.<\/p>\n

2 Point Highlight<\/h2>\n

If you are involved in a loan with a federal agency, RESPA dictates that you are given a copy of the CD\u00a0at least three\u00a0days before\u00a0the final settlbent.<\/p>\n

Any errors that show up on the CD should be fixed as soon as possible, and no negotiations should move forward until all of the numbers on the document are correct.<\/p>\n","protected":false},"excerpt":{"rendered":"

The United States Department of Housing and Urban Development (HUD) has a very precise process for buying a home. Before October 2015, the\u00a0HUD closing statbent, otherwise known as the HUD-1 Settlbent Statbent, was one of the final documents that you would have\u00a0seen if you were trying to buy a HUD property. The HUD-1 has since been consolidated into the Closing Disclosure (CD) statbent.\u00a0Let’s take a look at the CD\u00a0document\u00a0and what it means to you as a buyer. What is a CD? Source:performinv.com In real estate, a CD is not an audio device, but rather\u00a0the statbent that the settlbent agent uses […]<\/p>\n","protected":false},"author":3,"featured_media":4712,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[256],"tags":[],"class_list":["post-4711","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-concepts","post--single"],"yoast_head":"\nHUD Closing Statement: What to Expect<\/title>\n<meta name=\"description\" content=\"HUD transactions are now finalized on the Closing Disclosure statement as of October 2015. 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