How to Read a HUD Statement
- 1.. Look at the first page of the HUD statement. Look over the basic details in Part B, such as your name, the seller's...
- 2.. Move on to the next page, which gives a detailed listing of each charge included in the summary on page one.
- 3.. Compare the actual costs with the good-faith estimates found on page three. Certain charges on the...
Full Answer
How do you read a HUD settlement statement?
Look at the first page of the HUD statement. Look over the basic details in Part B, such as your name, the seller's name and the property address. Read sections J and K, which give a summary of the total amounts owed from or due to the borrower or seller.
What are some of the transactions recorded on the HUD-1 Settlement Statement?
The HUD-1 Settlement Statement is a document that lists all charges and credits to the buyer and to the seller in a real estate settlement, or all the charges in a mortgage refinance.
Is a HUD statement the same as a settlement statement?
A HUD-1 form, also called a HUD-1 Settlement Statement, is a standardized mortgage lending document. Creditors or their closing agents use this form to create an itemized list of all charges and credits to the buyer and to the seller in a consumer credit mortgage transaction.
What does POC on a settlement statement mean?
Amounts paid to and by the settlement agent are shown. Items marked “(p.o.c.)” were paid outside the closing; they are shown here for informational purposes and are not included in the totals.
How do you read a closing statement?
3:2113:06How To Read A Closing Statement - YouTubeYouTubeStart of suggested clipEnd of suggested clipUsed so let's take a closer look at a blank alta closing statement this works much like a balanceMoreUsed so let's take a closer look at a blank alta closing statement this works much like a balance sheet organized into debits or expenses. And credits or increases.
What is the primary purpose of the settlement statement?
A settlement statement provides a breakdown of all the closing costs and credits involved in a real estate transaction or refinance.
Are HUD-1 Settlement Statements still used?
The HUD-1 Settlement Statement is a standard government real estate form that was once used by settlement agents, also called "closing agents," to itemize all charges imposed upon a borrower and seller for a real estate transaction. The statement is no longer used, with one exception: reverse mortgages.
What is the difference between a closing statement and a settlement statement?
Settlement Statements –This is the version supplied solely to the buyer and contains only information pertinent to the buyer's side of the transaction. Seller's Closing Statement – This provides a breakdown of all transactions and fees and how they play into what the seller will net.
What is the difference between a closing disclosure and a settlement statement?
While closing disclosures provide information about a borrower's loan, settlement statements do not include loan information. Settlement statements are used for commercial transactions and cash closings.
What does Pog mean on a closing statement?
Charges paid outside of settlement by the borrower, seller, loan originator, real estate agent, or any other person, must be included on the HUD-1 but marked “P.O.C.” for “Paid Outside of Closing” (settlement) and must not be included in computing totals.
Is a HUD-1 the same as a closing statement?
The HUD-1 form, often also referred to as a “Settlement Statement”, a “Closing Statement”, “Settlement Sheet”, combination of the terms or even just “HUD” is a document used when a borrower is lent funds to purchase real estate.
What is lip on closing statement?
Loan-in-Process (LIP): Loan proceeds placed into a special account that will be used for improvements to the property.
Is HUD and closing disclosure the same?
The Closing Disclosure combines and replaces the HUD-1 Settlement Statement and the final Truth-in-Lending (TIL) statement. The form mirrors the information provided on the Loan Estimate.
Who provides the HUD settlement statement?
A settlement agent, or closing agent, will prepare a HUD-1 settlement statement at the closing of a real estate loan. The final version will explicitly state all costs involved with the real estate loan and to whom the individual charges and fees will be paid to.
How do I get my HUD payoff statement?
Requests for payoff statements, subordinations, releases, and other documentation specific to these programs can be submitted to:Payoff Requests: [email protected] Requests: [email protected] Requests: [email protected] Partial Claim document submittal: [email protected] items...
What is the difference between a HUD statement closing disclosure and combined Alta statement?
Unlike the Closing Disclosure that is meant to show the closing costs exclusively to the borrower (buyer), the ALTA statement is like a receipt given to agents and brokers on both sides of the transaction.
How long do you have to give a closing disclosure?
In contrast, lenders must give you a closing disclosure three days before closing. Everyone taking out a HELOC, reverse mortgage or manufactured home loan should ask their lender for the HUD-1 document at least a day before closing to allow time to review the contents, fix errors and raise questions with the lender.
What is section 300?
No. 5 (Section 300): Cash at settlement from/to borrower. This section explains if you need to bring cash to the settlement. In most cases, the closing costs for a reverse mortgage refinance or HELOC will be subtracted from the loan, so you don’t need to bring funds to the closing.
What is a HELOC loan?
A HELOC is a mortgage-based line of credit that works much like a credit card. It allows you to pull from your home’s existing equity (or the value of the home that you own, compared to what you still owe to your lender) on a revolving basis.
How long does it take to pay down a HELOC?
You can borrow as much as you need up to your maximum loan amount, then pay it down to zero as many times as necessary during a set draw period that usually ends after 10 years.
How long does a HELOC loan last?
This revolving product has a set draw period that usually ends after 10 years. After the draw period is over, you pay the remaining balance in fixed payments until it is paid in full.
What is the first page of a HUD settlement statement?
The first page of the settlement statement has a transaction overview, including the amount of cash you need to bring to closing. The sections below are highlighted so you can have an idea of what they look like on the HUD-1 settlement statement you’ll receive.
What is section 200 in mortgage?
No. 4 (Section 200): Amount paid by or on behalf of borrower. This section details any credits you receive toward costs you’ve already paid or that the seller is paying. Line 201 shows the money you’ve already paid, such as an earnest money deposit, while Line 202 reflects the principal amount of the new loan.
What is YSP mortgage?
Yield Spread Premium or YSP for short is the “rebate” your mortgage broker receives from the wholesale lender for charging you an above market mortgage rate. This markup of the wholesale mortgage rate that your lender approved you is what makes mortgage interest rates retail by nature. Online Mortgage lenders encourage this overcharging with the discount broker rebate because they make the majority of their profits selling loans with above market rates to investors on the secondary market. The problem with this “broker’s rebate” is that it is rarely disclosed and could raise your lowest mortgage payment by hundreds of dollars every month. Question the average mortgage broker about Yield Spread Premium and you’ll have a defensive and often angry person on your hands.
How to find broker rebate on HUD?
Once you have the HUD-1 statement from your lender you’ll find that it closely resembles the Good Faith Estimate you received. If Yield Spread Premium you will find it around lines 810 or 811. If these lines are blank you’ll have no broker rebate…that’s exactly what you want to find on the HUD-1 statement. If you find a “Broker Rebate” with a number next to it you’ve got Yield Spread Premium, and yes that large number is in dollars. This is your mortgage broker’s cash compensation for overcharging you. In most cases this is being paid in addition to the origination fee you’re already paying for the broker’s services (and are probably overpaying).
How to find yield spread premium?
The first opportunity you’ll have during the mortgage process to spot the infamous broker rebate is on your wholesale lender’s rate lock confirmation. Once you’ve agreed to lock in your mortgage rate if you’re dealing with an honest mortgage broker you will receive written confirmation FROM THE LENDER. Shady mortgage brokers will try and pass off written confirmation typed up on their own letterhead. If you get rate lock confirmation like this from your mortgage company or broker, you have not locked in your mortgage rate. Unless you have written confirmation FROM THE LENDER you could be a victim of a bait-and-switch scam when the loan you were promised falls through because your mortgage broker did not properly lock in your mortgage rate.
What is a POC on HUD?
The broker rebate or Yield Spread Premium is frequently referred to as POC charges, meaning Paid Outside of Closing. This is simply legal speak for Yield Spread Premium…don’t be fooled.
What is a good faith estimate?
Your Good Faith Estimate is just an estimate. The law requires that your get this document after submitting your application; however, it does not require that it accurately reflect the fees associated with any mortgage offer. After all the Good Faith Estimate is only an estimate and mortgage brokers frequently low ball closing costs and leave their markup of your lowest mortgage rate off this document completely.
What is broker courier fee?
Broker Courier Fee This is another made up fee that will be going directly into your mortgage broker’s pocket.
What is the HUD-1 statement?
Using the HUD-1 statement to reconcile what your mortgage loan broker promised on your Good Faith Estimate will give you an accurate picture of your loans actual fees and closing costs. Here are tips to help you make sense of this important mortgage document.
What Does the HUD-1 Show?
The HUD-1 is a multi-part form, divided into sections by topic, as described below. It's also divided into the buyer's side and the seller's side. The buyer is referred to as the "borrower" on the form because the HUD-1 was created to explain closings involving lender financing. However, the HUD-1 is sometimes used in cash-only deals when closed by a title insurance company or separate escrow company.
What lines are real estate taxes billed on?
Real property taxes and assessments that are proportionally divided between the borrower and seller as of the closing date are shown on lines 210 through 212 on the borrower's side, and lines 510 through 512 on the sellers side. General real property taxes due, but not yet billed and payable, are credited to the borrower in lines 210 and 211, and debited to the seller in the corresponding 500 series lines.
What is Martindale Nolo?
Nolo is a part of the Martindale Nolo network, which has been matching clients with attorneys for 100+ years.
What line is closing cost credit?
Any closing cost credit given by the seller to the borrower will appear in the 200 and 500 line series.
What line is the face amount of a first purchase money loan?
The face amount of the first purchase money loan is shown on line 202. The amount of a seller's loan assumed by the borrower is shown on line 203. Second purchase money mortgages, or home equity loans that are subordinate to the first purchase money loan, are shown on lines 205 through 209. In states where the seller pays for the owner's title insurance policy, the borrower's credit for the premium for the owner's title insurance policy is shown on line 204, and debited to the seller on Line 507.
What are the sections J and K?
Sections J and K show the transactions between the borrower and the seller, and summarize the fees and payments from Section L on the following page. Line numbers in the 100, 200, and 300 series pertain to the borrower. Line numbers in the 400, 500, and 600 series pertain to the seller. Some of this gets a little dry, but it's worth wading through, to make sure you fully understand the form.
What is the 100 and 400 line?
The 100 series shows debits to the borrower and the 400 series showing corresponding credits to the seller.
When Is a HUD-1 Used in 2020?
The HUD-1 settlement statement is still used in 2020 for reverse mortgages. These types of mortgages are very popular with sellers over the age of 62 who want to pull equity out of their homes. 4
When Is the HUD-1 Distributed?
Before October 3, 2015, RESPA stated that borrowers should be given a copy of the HUD-1 at least one day prior to settlement. 5 However, entries could easily still be coming in, right up until a few hours before closing.
What is line 902 on a mortgage?
Line 902 shows mortgage insurance premiums that are due at settlement. Escrow reserves for mortgage insurance are recorded later. It should be noted here if your mortgage insurance is a lump sum payment that's good for the life of the loan.
What is HUD-1 Settlement Statement?
Janet Wickell. Updated January 29, 2020. The HUD-1 Settlement Statement is a standard government real estate form that was once used by settlement agents, also called closing agents, to itemize all charges imposed upon a borrower and seller for a real estate transaction.
What is line 903 used for?
Line 903 is used to record hazard insurance premiums that must be paid at settlement to have immediate insurance coverage on the property. It's not used for insurance reserves that will go into escrow.
What is HUD-1 form?
The statutes of the Real Estate Settlement Procedures Act (RESPA) required that the HUD-1 form be used as the standard real estate settlement form in all transactions in the United States that involved federally related mortgage loans. 2.
When did the closing disclosure change?
Borrowers began receiving a form called the Closing Disclosure instead of a HUD-1 for most kinds of mortgage loans after October 2015. The change was in response to the TILA RESPA Integrated Disclosures, or simply TRID, which overhauled the way mortgages are processed and disclosed. 3.
What is section L in a settlement?
Section L contains a long list of settlement charges. Charges shown in the left column are to be paid by the buyer, and charges shown in the right column must be paid by the seller. The settlement charges are grouped into the following line series:
What is a HUD-1?
The HUD-1 is the financial picture of the real estate closing. It shows all of the money transfers between the buyer and seller, as well as the closing costs, including the escrow and title fees and the costs of the buyer’s loan, if applicable. The HUD-1 is a standardized form that the title company prepares for the closing, as required for all closings involving a federally insured lender under the Real Estate Settlement Procedures Act (“RESPA”). It is important to save your HUD-1 for your tax preparer. You will need it in the year of the purchase, as well as the year the property is sold. The HUD-1 form itself was created by the U.S. Department of Housing and Urban Development (“HUD”) and is updated periodically.
What is HUD-1 Settlement Statement?
The HUD-1 Settlement Statement is a document that lists all charges and credits to the buyer and to the seller in a real estate settlement, or all the charges in a mortgage refinance. If you applied for a mortgage on or before October 3, 2015, or if you are applying for a reverse mortgage, you receive a HUD-1.
What form do you use for a refinance loan?
In transactions that do not include a seller, such as a refinance loan, the settlement agent may use the shortened HUD-1A form.
Can I share my PII?
Please do not share any personally identifiable information (PII), including, but not limited to: your name, address, phone number, email address, Social Security number, account information, or any other information of a sensitive nature.
