What is a HUD-1 Settlement Statement?

A HUD-1 Settlement Statement is a critical document used in real estate transactions, particularly in the context of closing a mortgage. It provides a detailed breakdown of all closing costs and fees associated with the transaction, including loan origination fees, title insurance, and costs for inspections, among others. This comprehensive statement ensures transparency for both the buyer and seller regarding the financial aspects of the deal.

The accuracy and clarity of this document enable both parties to understand the total costs involved, confirming that all financial obligations are met before finalizing the sale. This is crucial for ensuring that there are no unexpected expenses at the closing table, contributing to a smooth transaction process.

Other options like a report summarizing a buyer’s financial history, a list of property taxes due at closing, or a checklist for home inspections do not capture the essence of the HUD-1 statement, which is specifically focused on outlining the financial costs at the closing of a real estate transaction.