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Max Purchase Price
$200,000
Actual Purchase Price
$175,000
Locked Interest Rate
4.46%
Interest Rate National Avg
Inspection Period Countdown
10 days left
Closing Date Countdown
45 days left

Important FAQs

How do I know what closing/settlement costs I'm responsible for?

Seller's closing/settlement costs are defined on the HUD-1 Settlement Statement

When & how do I get a copy of my HUD-1 Settlement Statement?

What closing/settlement costs will I have to pay?

Closing/Settlement Costs vary based on the following factors:

However, closing/settlement costs usually include the following:

Am I going to be on Escrow?

  • This decision should have already been made earlier in the process
  • If you have not yet decided, return to section 5) Offer Accepted

What happens on closing/settlement day?


Assuming all goes smoothly, Closing/Settlement should take 1-2 hours


States in the western half of the US
  • Referred to as "closing"
  • Closing usually occurs in Escrow
  • Both parties need not be present at the same time
  • Closing agent holds the money and the signed deed, and arranges for the transfer


States in the eastern half of the US

  • Referred to as "settlement" 
  • All parties involved meet at a settlement company at the same time.
  • Presided over or supervised by a lawyer or settlement agent. 
  • Settlement agent disburses all funds listed on the settlement statement

Pay Closing/Settlement Costs
Sign Documents
  • You will initial and sign many documents.
  • These documents are explained further below

Results

  • Terms of the agreement between you and your mortgage lender are confirmed 
  • Your loan goes into effect and you receive your mortgage 
  • The sales contract agreements are confirmed 
  • Ownership of the home is transferred

Who will be present at closing/settlement?

This can vary.  Here is a general idea:

You  - You definitely need to be there.
Closing/Settlement Agent - The closing/settlement agent will be there to conduct the event.
Seller - The seller may be present.  However, they may sign their paperwork at a separate time.
Real Estate Agents - If someone has an agent, they should be there but are not required to be.
Lender Representative - A representative of the lender may or may not attend.
Attorneys - Certain states require that an attorney be present. The closing/settlement company will provide the attorney.
 

What documents will I sign at closing/settlement?

Most of the following documents will be reviewed and signed at closing/settlement.
Most of these documents will be generated by the closing/settlement agent.

HUD-1 Settlement Statement                       HUD-1 example
Truth-in-Lending Disclosure Statement       Truth-in-Lending example
Mortgage Note    or     Deed of Trust                                                 

When & how do I get a copy of my HUD-1 Settlement Statement?

  • Contact the closing/settlement agent 24 hours before closing/settlement
  • Request to pick the HUD-1 up or have them email or fax it to you.

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News / Articles

Closing Costs Up Almost 10% in a Year.

Some Lenders Do Offer Discounts on Closing Costs

Short on cash for closing costs? Not necessarily a deal-breaker...

Gov't looking to add more taxes to your closing costs...

Lesson: Reducing the Price $54,000 Will Help Sell a Home

HOW...

How to Estimate Closing Costs
How to Lower Closing Costs
How to Buy a House With No Closing Costs
How to Calculate Seller Closing Costs
How to Read a HUD-1 Statement
How to Understand Real Estate Closing Statements
How to Claim Closing Cost Deduction on Income Tax Return
Many home sales taking 2 months to close due to backlog in mortgage approvals...

HUD-1 & Truth-in-Lending form may be replaced...

Expecting to close on time? Better make sure your loan officer knows what they're doing...

Having closing day regrets? You are not alone...





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Task Checklist

In "Closing/Settlement" you will be responsible for the following tasks:
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HUD-1 Explanation (pg 1 - Summary of Transaction)

We've broken down pg 1 of the HUD-1 Settlement Statement below:

HUD-1 Example
100 Gross Amount Due From Borrower

 101 Contract Sales Price

Definition:
Sales price of the property being sold

Facts:
  • Excludes the price of any items of tangible personal property if a separate price has been agreed upon

 102 Personal Property

Definition:
Sales price of any items of tangible personal property excluded from Line 101.

Facts:
  • Personal property could include such items as carpets, drapes, stoves, refrigerators, etc.
  • What constitutes personal property varies from state to state.
  • Manufactured homes are not considered personal property for this purpose.

 103 Settlement Charges to Borrower

Definition:
Total amount of buyer's closing/settlement costs

Facts:
  • Used to record the total charges to Borrower detailed in Section L and totaled on Line 1400

 106-112 Adjustments for items paid by seller in advance

Definition:
Total amount of items paid in advance by the seller that the buyer will reimburse.

Examples:
  • Taxes and assessments paid in advance for an entire year or other period
  • Insurance premiums in which the Borrower is being substituted as an insured under the same policy

 120 Gross Amount Due From Borrower

Definition:
Total of Lines 101 through 112

 200 Amount Paid by or in Behalf of Borrower

 201 Deposit or Earnest Money

Definition:
Any amount paid against the sales price prior to settlement.

Examples:
  • Earnest Money
  • Down Payment

 202 Principal amount of new loan(s)

Definition:
Amount when loan for new construction is used as or converted to a loan to finance purchase.

 203 Existing loan(s) taken subject to

Definition:
Amount when the Borrower is assuming or taking title subject to an existing loan or lien on the property.

 Adjustments for items unpaid by sellers

 210 -219 City/Town/County Taxes, Assessments, & more

Definition:
Items attributable in part to a period of time prior to closing/settlement to be paid by the Borrower.

Examples:
  • Prorated taxes
  • Utilities used but not paid for by the Seller
  • Rent collected in advance by the Seller from a tenant for a period extending beyond the settlement date
  • Interest on loan assumptions

  220 Total paid by/for Borrower

Definition:
Total of Lines 201 - 219

 300 Cash at Settlement from/to Borrower

 301 Gross amount due from borrower (line 120)

Definition:
Summary line for the Borrower showing the total in Line 120

 302 Less amounts paid by/for borrower (line 220)


Definition:
Summary line for the Borrower showing the total in Line 220 .

 303 Cash From or To Borrower

Definition:
Indicates whether cash is required from (most common) or payable to the Borrower at closing/settlement

Facts:
  • To find amount subtract Line 302 from Line 301

 400 Gross Amount Due to Seller

 401 Contract Sales Price

Definition:
Sales price of the property being sold

Facts: 
  • Excludes the price of any items of tangible personal property if a separate price has been agreed upon

 402 Personal Property

Definition:
Sales price of any items of tangible personal property excluded from Line 101.

Facts:
  • Personal property could include such items as carpets, drapes, stoves, refrigerators, etc.
  • What constitutes personal property varies from state to state
  • Manufactured homes are not considered personal property for this purpose

 406-412 Adjustments for items paid by seller in advance

Definition:
Total amount of items paid in advance by the seller that the buyer will reimburse.

Examples: 
  • Taxes and assessments paid in advance for an entire year or other period
  • Insurance premiums in which the Borrower is being substituted as an insured under the same policy

 420 Gross Amount Due To Seller

Definition:
Total of Lines 101 through 112.

 500 Reductions in Amount Due to Seller

 501 Excess Deposit (see instructions)

Definition:
Excess deposit amount returned to the Seller from a party other than the closing/settlement agent.

Example:
  • Earnest money deposit held by seller's broker which exceeds their fee or commission

 502 Settlement charges due to seller (line 1400)

Definition:
Total charges to the Seller detailed in section L and totaled on Line 1400.

 503 Existing loan(s) taken subject to

Definition:
Amount deducted from the sales price if the Borrower is assuming or taking title subject to existing liens.

 504 & 505 Payoff of first & second mortgage loan

Definition:
Amounts (including accrued interest) of 1st/2nd loans to be paid as part of closing/settlement.

 Adjustments for items unpaid by seller

 510 -519 City/Town/County Taxes, Assessments, & more

Definition:
Items attributable in part to a period of time prior to closing/settlement to be paid by the Borrower.

Examples:
  • Prorated taxes
  • Utilities used but not paid for by the Seller
  • Rent collected in advance by the Seller from a tenant for a period extending beyond the settlement date
  • Interest on loan assumptions

 520 Total Reduction Amount Due to Seller

Definition:
Total of Lines 501 - 519

 600 Cash at Settlement to/from Seller

 601 Gross amount due to seller (line 420)

Definition:
Summary line for the Seller showing the total in Line 420
 

 602 Less reductions in amounts due seller (line 520)

Definition:
Summary line for the Seller showing the total in Line 520

 603 Cash To or From Seller

Definition:
Indicates whether cash is payable to (most common) or required from Seller at closing/settlement

Facts:
  • To find amount subtract Line 602 from Line 601


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HUD-1 Explanation (pg 2 - Closing/Settlement Charges)

We've broken down pg 2 of the HUD-1 Settlement Statement below:

HUD-1 Example
700 Total Sales/Broker's Commission based on price

 700 Total Real Estate Broker Fees

Definition:
Total dollar amount of the real estate brokers' sales commission

Negotiable?   Yes
Negotiate with seller or their broker

Estimate:
6% of the total sales price

Facts:
  • Normally paid by the seller to the seller's broker/agent
  • Seller's broker then normally splits the amount with the buyer's agent
  • Split amount of the commission stated in lines 701 &702
  • My6% contract splits this commission with the buyer in the form of a rebate

 701 & 702 Division of commission line 700

Definition:
States how the closing/settlement agent will disburse the commission in line 700

Negotiable?   Yes

Estimate:
  • Normally: 3% of the total sales price to the seller's agent, 3% of the total sales price to the buyer's agent,
  • With the My6% Rebate: 3% of the total sales price to the seller's agent, 3% of the total sales price back to you

Facts:

 703 Commission paid at settlement

Definition:
Total amount of sales commission disbursed at settlement.

Negotiable?  Yes

Estimate:
6% of the total sales price

Facts:
  • Normally the same as line 700
  • Only different if he seller's broker is retaining a part of the deposit to apply towards theircommission

800 Items Payable In Connection With Loan

  801 Our Origination Charge

Definition:
Loan Origination Fee charged by a lender for administrative costs

Negotiable?   Yes
Negotiate with lender

Estimate:
1% of the total loan amount

Facts:
  • Expressed as a percentage of the mortgage amount
  • AKA underwriting fee, administrative fee, or processing fee
  • Often covers document preparation fee (1105), notary fee (1106), attorney fee (1107) , & other charge

 802 Your credit or charge (points) for the specific interest rate chosen

Definition:
Charge or credit adjustment to Line 801 "Our Origination Charge", if applicable

Facts:
  • Previously known as loan discount points (one-time fee paid to lender to "buy down" your interest rate)
  • If an amount appears here, discuss it with you lender

 803 Your adjusted origination charges

Definition:
Sum of Lines 801 & 802 (net amount of the loan origination charges)

Facts:
  • Amount must be specified as either a positive or negative number

 804 Appraisal Fee to

Definition:
Fee to have an independent Appraisal done on the home.

Negotiable?  Usually Not

Estimate:
$200 - $500

Facts:
  • May be listed as P.O.C (Paid outside of closing) if this fee was already paid
  • Appraisal is normally required by your lender
  • Lender normally chooses the appraiser, therefore the amount is not negotiable

 805 Credit Report to

Definition:
Fee for obtaining a detailed record of your credit history (credit report).

Negotiable?  Yes
You may be able to ask the lender to waive this fee

Estimate:
Free - $75

Facts:
  • May be listed as P.O.C (Paid outside of closing) if this fee was already paid
  • Lender uses your credit report to help decide whether to approve your loan or not
  • Lender also uses report to decided how much money to lend you

 806 Tax service to

Definition:
Fee for any tax service

Negotiable?

Estimate:
$50 - $150

Facts:
  • May be listed as P.O.C (Paid outside of closing) if this fee was already paid

 807 Flood certification to

Definition:
Fee covering the processing of any flood certification

Negotiable? 


Estimate:
Free - $50

Facts:
  • May be listed as P.O.C (Paid outside of closing) if this fee was already paid

 808 VA Funding Fee


Definition:
One-time fee charged on a VA Loan in order to limit the overall cost of the loan

Negotiable? 

Estimate:
1%-2% of total sales price

Facts:
  • Lines 808-811 can also be used to record other third party services required by the loan originator
  • VA funding fee applies only to VA loans
  • Fee percentage depends on the amount of your down payment

900 Items Required By the Lender to be Paid in Advance

 901 Daily interest charges from

Definition:
Fee for the interest that accrues from the date of settlement to the first monthly payment

Negotiable? 

Estimate:

Facts:

 902 Mortgage insurance premium for

Definition:
Fee for any mortgage insurance premiums due at settlement

Negotiable? 

Estimate:

Facts:
  • May include monthly amounts due at settlement and any upfront mortgage insurance premium
  • Some lenders charge this premium for loans with little equity

 903 Homeowner's insurance for

Definition:
Homeowner's insurance premiums required by the lender to be paid at settlement

Negotiable? 

Estimate:

Facts: 
  • aka Homeowner's Insurance, Home Insurance
  • Must be paid at settlement in order to have immediate insurance on the property
  • Not used for insurance reserves that will go into escrow

1000 Reserves Deposited With Lender (Escrow)

 1001 Initial Deposit for your escrow account

Definition:

Negotiable? 

Estimate:

Facts:

 1002 Homeowner's insurance

Definition:
Prepayment of your future homeowner's insurance expense

Negotiable? 

Estimate:

Facts:

 1003 Mortgage Insurance

Definition:
Prepayment of your future mortgage insurance expenses

Negotiable? 

Estimate:

Facts: 

 1004 Property Taxes

Definition:

Negotiable? 

Estimate:

Facts:
  • Amount depends on the value of the home and local property tax rate

 1007 Aggregate Adjustments

Definition:

Negotiable? 

Estimate:

Facts:
1100 Title Charges

 1101 Title services and lender's title insurance

Definition:
Total of fees covering title charges and charges by attorneys and closing/settlement agents

Negotiable? Yes!

Estimate:
$10 - $5000 (Cost of the policy normally depends on the price of the home)

Facts:
  • Responsibility for payment of this fee is usually negotiated between the seller and the buyer
  • May also include other related settlement, notary, and delivery fees
  • Cost of the policy normally depends on the price of the home

 1102 Settlement or closing fee

Definition:
Fees charged by the closing/settlement agent for conducting closing/settlement

Negotiable? 

Estimate:
$500 - $1500

Facts:
  • Rates may vary considerably from company to company
  • Escrow/closing agent should be able to provide an estimate of the escrow fees and costs

 1103 Owner's title insurance

Definition:
Protects the owner against any claims and legal fees resulting from problems connected to the title of a property

Negotiable? 

Estimate:
Cost of the policy normally depends on the price of the home

Facts: 
  • Different from a lender's title insurance policy
  • Liability limit is typically the purchase price paid for the property
  • Buyer or seller can pay the policy premium (this is negotiable)

 1104 Lender's title insurance

Definition:
One-time fee paid to obtain a lender's title insurance policy

Negotiable? 

Estimate:
Cost of the policy normally depends on the price of the home

Facts:
  • aka: Loan Policy, Mortgage Policy
  • All mortgage lenders require a title insurance policy equal to the amount of the loan
  • Does not protect the buyers equity in the home

 1105 Lender’s title policy limit $

Definition:
Amount of the lender's title policy limit

Negotiable? 

Estimate:

Facts:

 1106 Owner’s title policy limit $

Definition:
Amount of the owner's title policy limit

Negotiable? 

Estimate:

Facts:

 1107 Agent’s portion of the total title insurance premium to

Definition:
Amount of the total title insurance premium, including endorsements, that is retained by the title agent

Negotiable? 

Estimate:

Facts:

 1108 Underwriter’s portion of the total title insurance premium to

Definition:
Amount of the total title insurance premium, including endorsements, that is retained by the underwriter

Negotiable? 

Estimate:

Facts:
1200 Government Recording and Transfer Charges

 1201 Government recording charges

Definition:
Fees charged by a county recorders office to record a mortgage or deed of trust

Negotiable? 

Estimate:

Facts:

 1202  Deed / Mortgage / Release

Definition:
Itemized recording charges

Negotiable? 

Estimate:

Facts:

 1203 Transfer taxes

Definition:
Transfer tax amount

Negotiable? 

Estimate:

Facts:

 1204-1205 City/County/State tax/stamps  

Definition:
Amounts for local & state transfer taxes & stamps

Negotiable? 

Estimate:

Facts:
1300 Additional Settlement Charges

 1301-1305+ Required services that you can shop for

Definition:
Required services that the borrower can shop around for

Negotiable?    Yes!
  • Negotiate prices with the providers
  • Negotiate who will pay with the seller
  • The amounts must be listed in either the borrower's or seller's column depending on who will pay
Estimate:

Examples:
  • Survey fees
  • Home Warranty
  • HOA transfer fees
  • Lead-based paint inspections
  • Wood Destroying Insects (aka WDI or Termite Inspection)
  • Pest Inspection
  • Radon testing
  • Septic inspections
  • Water quality
  • Mold & private well
  • Pre-sale inspections of heating, plumbing, or electrical equipment
1400 Total Settlement Charges

103 Settlement charges to borrower

Definition:
Total closing/settlement costs for the buyer

Negotiable? 

Estimate:

Facts:
  • Recorded in section 103 on pg1 of HUD-1
  • Calculated by adding left column of sections 700-1300

502 Settlement charges to seller

Definition:
Total closing/settlement costs for the seller

Negotiable? 

Estimate:

Facts:
  • Recorded in section 502 on pg1 of HUD-1
  • Calculated by adding right column of sections 700-1300

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HUD-1 Explanation (pg 3 - Good Faith Estimate & HUD-1 Comparison)

Pg 3 of the HUD-1 Settlement Statement is broken down for you below:
(this page is a comparison of your GFE & HUD-1)

GFE example
HUD-1 Example    (official instructions)


Comparison of Good Faith Estimate (GFE) and HUD-1 Charges:

Charges that Cannot Increase

Our origination charge

From GFE line: 1
From HUD-1 line: 801

Your credit or charge (points) for the specific interest rate chosen

From GFE line: 2
From HUD-1 line: 802 

Your adjusted origination charges

From GFE line: A
From HUD-1 line: 803 

Transfer Taxes

From GFE line: 8
From HUD-1 line: 1203 
Charges That In Total Cannot Increase More Than 10%

Government recording charges

From GFE line: 7
From HUD-1 line: 1201 

Additional charges

From GFE lines: 3, 4, 5, 6
From HUD-1 line: (various)  
Charges That Can Change

Initial deposit for your escrow account

From GFE line: 9 
From HUD-1 line: 1001 

Daily interest charges

From GFE line: 10
From HUD-1 line: 901 

Homeowner's insurance

From GFE line: 11
From HUD-1 line: 903 
Loan Terms

Your initial loan amount is

Total amount owed on your Mortgage Loan

Your loan term is

Total period of your loan agreement. Loan should either be repaid or renegotiated within this time.

Your initial interest rate is

Interest Rate of your loan

Your intial monthy amount owed for principal, interest, & any mortgage insurance is

Amount you will pay to the lender per month (does not include Taxes or Homeowner's Insurance)

Can your interest rate rise?

Even if you make payments on time, can your loan balance rise?

Even if you make payments on time, can your monthly amount 
     owed for principal, interest, & mortgage insurance rise?

Does your loan have a prepayment penalty?

Does your loan have a balloon payment?

Total monthly amount owed including escrow account payments

Total amount you will pay each month.

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Use HUD-1 & GFE to Examine All Closing/Settlement Costs

You may inspect the HUD-1 Settlement Statement 1 day prior to Closing/Settlement.
Request your HUD-1 statement from the closing/settlement agent.

* If you've saved your GFE and/or HUD-1, find them in the files section of your account using our Quick Tools module.


What do I inspect on the HUD-1 Settlement Statement?

Example GFE & HUD-1:

GFE Example
HUD-1 Example    (official instructions)

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Conduct a Final Walk-Through of the Home

Before going to Closing/Settlement events you should arrange a Final Walk-Through of the home.


When should I do my final walk-through?

If no repairs were necessary:
  • Check the property on the day of closing/settlement, a couple of hours before the actual event.
If the seller has agreed to repair something on the property:
  • Check the property a few days before closing/settlement day.
  • Make sure all work was done to your satisfaction. 
  • If the repairs are not adequate, request corrections before closing/settlement day.
  • Go back to the property on closing/settlement day to ensure that everything is still in tact.

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Make Final Closing/Settlement Preparations

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Bring the Following Items to Closing/Settlement

Bring:

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Congratulations!

Your home purchase is complete!

You are now a homeowner!

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