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HUD-1 Statement Overview

HUD-1 Statement Overview

  • Great Mortgage IdeaPlease note that the HUD-1 Statement was replaced by the Closing Disclosure effective October 3rd, 2015 and is no longer used in the mortgage process. We provide the HUD-1 Statement overview below for your reference but recommend that you review the Closing Disclosure for more relevant information
  • RESPA (the law that regulates the mortgage process) requires the settlement agent (escrow company or attorney) to issue the borrower an estimated HUD-1 Statement at least one day prior to the closing of the loan.  Typically the borrower receives the estimated HUD-1 when he or she signs loan documents three-to-four days prior to closing.  The HUD-1 is a standardized form that lists the final, actual terms and costs of your mortgage, including your interest rate, points and all one-time fees.  The borrower should use the estimated and final HUD-1 Statements to verify that he or she is receiving a mortgage at the terms agreed to at the start of the process.

  • FREEandCLEAR Mortgage Instructional Video

    HUD-1 Statement Overview Video

  • The first two pages of the HUD-1 outline the final, actual mortgage transaction terms and settlement costs (also known as closing costs).  The third page of the HUD-1 compares the final, actual closing costs to the estimated closing costs provided in the Good Faith Estimate that the lender should have provided to you at the beginning of the mortgage process. Page three of the HUD-1 also indicates by how much the final closing costs can legally change as compared to the estimated costs provided in the Good Faith Estimate.

    Certain closing costs such as lender fees (also known as origination fees or charges) and any discount points the borrower decides to pay, are NOT allowed to change from the initial estimate provided by the lender.  Other non-lender closing costs such as the appraisal fee, escrow or attorney fee and title services fee cannot increase more than 10% from the initial estimate provided by the lender.  Certain recurring closing costs, or costs that you will continue to pay after your mortgage closes, such as daily interest charges from the date your mortgage closes until the end of the month in which your mortgage closes and homeowner's insurance fees are allowed to change because the final, actual amounts for these costs vary depending on the date your mortgage closes.

    The key items to review when comparing the HUD-1 and GFE are interest rate and settlement / closing costs such as the appraisal and escrow fees and title services costs.  If the figures and information in the HUD-1 and GFE match or are relatively close, then you are all set to close your mortgage.  If there are meaningful discrepancies between the HUD-1 and GFE and the final mortgage terms and costs have changed or increased significantly, this could be a sign that you are not getting the mortgage you thought you were and that you are potentially getting ripped off.

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    Points  More Info:
    Points: Fees you are willing to pay in order to get a lower interest rate. The number of points refers to the percentage of the loan amount that you would pay. For example, "2 points" means a charge of 2% of the loan amount.
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    Monthly Housing Payments
    P & I More Info
    Principal & Interest: A periodic payment, usually paid monthly, that includes the interest charges for the period plus an amount applied to the reduction of the principal balance.
    Mortgage Insurance More Info
    Mortgage Insurance: The monthly cost for a policy that protects the lender in case you’re unable to repay the full amount of the loan. It is typically required for loans that have a loan-to-value ratio between 80% to 100%.
    Property Tax More Info
    Property Tax: (Also called "Real Estate Tax.") Property taxes are government assessments on real estate property. With mortgage financing, the local, county or state tax assessment on real estate property is considered part of the monthly housing obligation and typically collected and set aside by the lender ...
    Homeowner Insurance More Info
    Homeowner Insurance: or also commonly called hazard insurance, is the type of property insurance that covers private homes. It is an insurance policy that combines various personal insurance protections, which can include losses occurring to one’s home, its contents, loss of its use, or loss of other personal possessions of the homeowner, as well as liability insurance for accidents that may happen at the home or at the hands of the homeowner within the policy territory.lender ...
    Homeowner Association Fee More Info
    Homeowner Association fee: (HOA) fees are funds that are collected from homeowners in a condominium complex to obtain the income needed to pay (typically) for master insurance, exterior and interior (as appropriate) maintenance, landscaping, water, sewer, and garbage costs.
    (If Any)
    Total Monthly Housing Payments
    Lender Fees
    Points More Info
    Points Fees you are willing to pay in order to get a lower interest rate. The number of points refers to the percentage of the loan amount that you would pay. For example, "2 points" means a charge of 2% of the loan amount.
    Origination Fee More Info
    Origination Charge: A loan origination charge is a fee charged by the lender for evaluating, processing, and closing the loan.
    Credit Report Fee More Info
    Credit Report Fee: Fee charged to obtain an applicant’s credit history prepared by one or all of the three major credit bureaus. Used by lender to determine the borrower’s creditworthiness.
    Tax Service Fee More Info
    Tax Service Fee: A fee charged by the lender to cover the cost of retaining a tax service agency. These agencies monitor the property tax payments on the property and report the results to the lender.
    Processing Fee More Info
    Processing Fee: A processing fee is a charge by the lender for clerical items associated with the loan. Examples of processing include loan set up, organization of loan conditions for underwriting, and preparing required disclosures for the borrower.
    Underwriting Fee More Info
    Underwriting Fee: A fee charged by the lender to verify information on the loan application, authenticate the property’s value, and perform a risk analysis on the overall loan package.
    Wire Transfer Fee More Info
    Wire Transfer Fee: In most cases lenders wire funds to escrow companies to fund a loan. Commercial banks that perform this function will charge the lender so the fee is generally passed on to the borrower.
    (If Any)
    FHA Upfront Premium More Info
    FHA Upfront Premium: A fee paid in cash at the close of escrow or more commonly it is financed into the loan. These premiums are pooled together by the FHA and are used to insure the risk of borrower default on FHA loans. FHA upfront premiums are prorated over a five year period, meaning should the homeowner refinance or sell during the first five years of the loan, they are entitled to a partial refund of the FHA upfront premium paid at loan inception.
    (If any)
    VA funding Fee (If any)
    Flood Fee
    Other Fees More Info

    Other fees could be either additional Administrative Fees that a lender charges or it could be a Flat Fee to cover all lender charges such as: (Origination Fees, Points, Underwriting and Processing Fees, Credit Reports and Tax Service Fees)

    The flat fee does not include prepaid items and third party costs such as appraisal fees, recording fees, prepaid interest, property & transfer taxes, homeowners insurance, borrower’s attorney’s fees, private mortgage insurance premiums (if applicable), survey costs, title insurance and related services.

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    *Actual rates and other information may vary. Sponsored results shown only include participating lenders. The information you enter on this page will only be shared with lenders you choose to contact, either by calling the phone number or requesting a quote.
    Current Mortgage Rates as of December 11, 2018
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    Data provided by Informa Research Services. Payments do not include amounts for taxes and insurance premiums. The actual payment obligation will be greater if taxes and insurance are included. Click here for more information on rates and product details.
  • Sources

    HUD-1 Statement:

About the author

Harry Jensen, Mortgage Expert

Harry is the co-founder of FREEandCLEAR. He is a mortgage expert with over 45 years of industry experience. Over his career, Harry has closed thousands of loans for satisfied borrowers and now offers his advice and insights on FREEandCLEAR. More about Harry


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