Palmer Harned, Realtor®
Palmer Harned
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The HUD-1, Translated

The name sounds boring enough, and just looking at the form might make you cross-eyed (you can take a peek at it here). But the HUD-1 is one of the most important documents you will sign at closing, so it’s good to understand a few key points beforehand.

The HUD-1 summarizes all the costs associated with the entire transaction. At the top, you’ll see the names and addresses of the buyer, seller, title company, lender and property, as well as the type of loan and settlement date. Further down, the left column always refers to the buyer and the right column always refers to the seller. The first page is a summary of all amounts due to and from each party. The second page breaks out these costs in detail.

Section 100 – Money owed by buyer. Includes sales price, total closing costs, prorated taxes and HOA fees.

Section 200 –  Money credited to buyer. Includes earnest money deposit amount, loan amount, prorated taxes and HOA fees.

Section 300 – Total cash that buyer must bring to closing.

Section 400 – Money credited to seller. Includes sales price and prorated taxes and HOA fees.

Section 500 – Money owed by seller. Includes mortgage payoff, closing costs, prorated taxes and HOA fees.

Section 600 – Total amount that seller will net from the sale.

Section 700 – Commissions and brokerage fees.

Section 800 – Loan fees. Includes points, appraisal, credit report.

Section 900 – Interest and insurance fees. Lenders require that mortgage interest (from settlement through the first payment date), as well as homeowners insurance for one year, be paid at closing and placed into an escrow account to ensure payment.

Section 1000 – Lender reserves. As with mortgage interest, lenders also collect reserves for taxes, HOA and additional insurance at closing.

Section 1100 – Title fees. Includes title insurance, title services, deed preparation.

Section 1200 – Recordation and transfer charges, to properly document the sale with the government.

Section 1300 – Additional charges. Includes pest inspection and HOA transfer fees.

The third page and final page gives a summary of the loan and compares the Good Faith Estimate to the actual charges. One more item to note, you’ll want to keep this form for when you file your taxes.


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