Hud-1 Closing Disclosure

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What is hud-1 closing disclosure?

The hud-1 closing disclosure is an important document that outlines the financial details of a real estate transaction. It provides a breakdown of all the costs involved in buying or selling a property, including loan fees, closing costs, and any credits or adjustments. This document is required by law to be provided to the buyer and seller at least three business days before the closing date to ensure transparency and accuracy.

What are the types of hud-1 closing disclosure?

There are two main types of hud-1 closing disclosures: the buyer's closing disclosure and the seller's closing disclosure. The buyer's closing disclosure is prepared by the lender and typically includes information about the loan, such as the interest rate, loan amount, and any prepayment penalties. The seller's closing disclosure, on the other hand, focuses on the seller's side of the transaction and provides details about their proceeds from the sale and any fees or credits associated with the transaction.

Buyer's closing disclosure
Seller's closing disclosure

How to complete hud-1 closing disclosure

Completing a hud-1 closing disclosure requires careful attention to detail. Here are the steps to follow:

01
Gather the necessary financial information and documents related to the real estate transaction.
02
Fill in the buyer's information, including name, address, and contact details.
03
Provide details about the property being bought or sold, such as the address, purchase price, and loan amount.
04
Itemize all the costs associated with the transaction, including loan fees, closing costs, and any other expenses.
05
Calculate the seller's proceeds, taking into account any credits or adjustments.
06
Double-check all the information for accuracy and make any necessary corrections.
07
Sign and date the hud-1 closing disclosure to certify its accuracy and completeness.

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Questions & answers

A HUD-1 or HUD-1A Settlement Statement is prepared by a creditor or, more typically, by the settlement agent who conducts the closing on the creditor's behalf.
The settlement statement can be provided to the homebuyer and seller by the mortgage lender, settlement agent, title company or a real estate attorney. If you got your mortgage prior to October 2015, you received a HUD-1 settlement statement.
(b) Charges to be stated. The settlement agent shall complete the HUD-1 or HUD-1A, in accordance with the instructions set forth in appendix A to this part. The loan originator must transmit to the settlement agent all information necessary to complete the HUD-1 or HUD-1A.
Sellers and buyers are ultimately responsible for reviewing their HUD-1 statements for accuracy and for ensuring that any errors are corrected before the end of closing. Also, no buyer or seller is obligated to complete a closing until all questions related to the HUD-1 have been answered satisfactorily.
As mentioned above, borrowers taking out reverse mortgages, HELOCs or certain manufactured home loans will get HUD-1 settlement statements instead.
In transactions that do not include a seller, such as a refinance loan, the settlement agent may use the shortened HUD-1A form. If you applied for a mortgage after October 3, 2015, for most kinds of mortgage loans you receive a form called the Closing Disclosure instead of a HUD-1.