Getting to Closing – Review the HUD-1 Statement

As you get closer to closing the sale of your home in Yakima, there are several essential documents you’ll encounter, one of which is the HUD-1 statement. This document plays a crucial role in the closing process, so it’s important to understand what it is and why reviewing it is vital. In this blog post, we’ll explore the HUD-1 statement and why it’s a key part of finalizing your Yakima real estate transaction.

What Is the HUD-1 Statement?

The HUD-1 statement, also known as the Closing Disclosure, is a standardized form provided by the U.S. Department of Housing and Urban Development (HUD). It is typically used in real estate transactions involving federally related mortgage loans. The HUD-1 statement provides a detailed breakdown of all the costs and expenses associated with the sale of the property.

Why Is It Important?

Reviewing the HUD-1 statement is crucial for several reasons:

• Transparency: The HUD-1 statement provides transparency regarding the financial aspects of the transaction. It outlines all the fees, charges, and credits associated with the sale, ensuring that both the buyer and seller have a clear understanding of the financial implications.
• Accuracy: It’s essential to ensure that all the information on the HUD-1 statement is accurate. Mistakes or discrepancies in the document can lead to complications during the closing process.
• Comparison: By reviewing the HUD-1 statement, you can compare the costs and fees listed with those outlined in the Loan Estimate provided by the lender. Any significant disparities should be addressed before closing.
• Legal Requirement: Federal law requires that the HUD-1 statement be provided to the buyer and seller at least three business days before closing. This gives both parties an opportunity to review the document thoroughly.

What Information Is Included?

The HUD-1 statement includes a detailed breakdown of various costs and expenses, including but not limited to:

• Sales price of the property
• Loan information, including the loan amount and interest rate
• Prorated property taxes and insurance premiums
• Real estate agent commissions
• Settlement or closing fees
• Title insurance and recording fees
• Prepaid interest
• Homeowner association fees (if applicable)

Reviewing the HUD-1 Statement

When you receive the HUD-1 statement, take the time to review it carefully. Pay close attention to the final figures, ensuring they align with your expectations and the terms of the sale. If you have any questions or notice discrepancies, don’t hesitate to reach out to your real estate agent or the closing agent for clarification.

Conclusion

The HUD-1 statement is a critical document in the closing process of your Yakima home sale. By understanding its purpose and carefully reviewing its contents, you can ensure a smooth and transparent transaction. Always seek professional guidance if you have any concerns or questions about the HUD-1 statement, as it plays a pivotal role in getting you to closing successfully.