CalculatingThe Amount You Need At Settlement

Selling your home is a complicated process full of settlement fees that you may not have taken into account of previously. However, through the HUD-1 Settlement Statement, it is much simpler to calculate the amount you need at settlements. The HUD-1 Settlement Statement contains various sections that clearly lays out summaries of the total settlement costs, the summary of the buyer's obligations of the costs, and most importantly, the summary of the seller's sides of the transaction. The total summary costs can be found on the first page of the HUD-1 Settlement Statement whereas on Section J details the summary of the borrower's transaction and the summary of the seller's share of the settlement costs can be found on Section K.

HUD-1 Settlement Statement

When calculating the amount you need at settlement, you will find that the HUD-1 Settlement Statement can be divided among three sections. Section 100 contains a summary of the borrower's costs, which includes such fees as: the contract cost of the house, the costs for any personal property that is being purchased from the seller, and the total settlement charges that is owed by the borrower relating to charges detailed in Section L of the HUD-1 Settlement Statement. During Section 100, adjustments can be made for fees such as taxes, assessments, and fuel, which the seller had previously paid. It is in this section that the buyer can repay the seller for that portion of the cost by making adjustments in this section.

In Section 200, there is a summary of the amount paid by the borrower on items such as: the deposit of money that was put down with the agreement of sale, the loans that the borrower is receiving, and the loans that the buyer may be assuming. In this section, adjustments are made for fees that the buyer will pay after settlement on items that the seller owes. These fees include taxes and assessments and in most cases the seller will either pay back the buyer for these charges or credit them in this portion of the settlement.

Section 300 of the HUD-1 Settlement Statement simply details the difference between the gross amount due from the borrower and the total amount paid by the borrower. This difference will determine the amount of money that the borrower owes in the settlement.