Princeton Town Topics – Let’s Talk Real Estate – April 27, 2011
WHAT IS A HUD-1 STATEMENT?
When you buy a home and apply for a mortgage loan, the Real Estate Settlement Procedures Act (RESPA) requires your lender to provide you with a good faith estimate (GFE) of projected closing costs. One day before the closing date (required by the RESPA), your lender will give you a HUD-1 statement, which is a form that itemizes all the charges that are connected to the sales transaction. You should go over your HUD-1 statement and compare the GFE estimates to the actual amounts on the HUD-1, which should be reasonably close. If you find a discrepancy, you can make a “qualified written request” to the lender. The lender must respond by correcting the mistake or justifying the charge within 60 days.
With so many details involved in a home purchase, mistakes do happen. So it is important to go over each item of the HUD-1 statement carefully and ask as many questions you can to understand all the charges, before you close the deal.