How to Complete a HUD Closing Statement
A HUD closing statement is required when a real estate transaction involves an FHA loan. This statement is also known as a HUD settlement statement or a HUD-1 form. Thanks to its convenience, the closing statement is now used in nearly all residential real estate closings, regardless of whether an FHA-backed loan is involved. The purpose of the statement is to note the individual party is taking responsibility for different costs associated with the transaction.
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Instructions
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1
List the total contract price for the property.
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2
Insert the amount of money the buyer is borrowing from a mortgage lender.
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3
State which party is responsible for any taxes due on the property at the time of sale.
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4
Include information on the distribution of real estate agent or broker fees. Set the percentage of the real estate professional fees to be assessed to each of the parties to the sale.
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5
Include a listing of how the costs associated with the title search and title insurance are distributed between the seller and buyer.
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6
Complete the other sections of the statement, which deal with miscellaneous costs, expenses and charges associated with the sale.
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Tips & Warnings
Completing the closing statement is time-consuming. In most cases, the statement is completed in advance of the scheduled closing time. The document can be completed by the individual who is acting as the closing agent--the real estate agent or broker, for example.
Review the closing statement closely to ensure all of the information is accurate.
References
- "Your Real Estate Closing Explained Simply"; Michelle Blain; 2007
- "Real Estate Closing Deskbook--A Lawyer's Reference Guide and State-by-State Summary"; K. F. Boackle; 2004
