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The first page of the HUD-1 Settlement
Statement summarizes all the costs and adjustments for the borrower and
seller. Section J is the summary of the borrower's transaction and
Section K is the summary of the seller's side of the transaction. You
may receive a copy of the seller's side, but it is not required.
Section 100 summarizes the borrower's
costs, such as the contract cost of the house, any personal property
being purchased, and the total settlement charges owed by the borrower
from Section L.
Beginning at line 106, adjustments are
made for items (such as taxes, assessments, fuel) that the seller has
previously paid. If you will benefit from these items after settlement,
you will usually repay the seller for that portion of the cost.
Here is an example for you to use in
making your own calculations:
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J. SUMMARY OF BORROWER'S TRANSACTION |
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100. GROSS AMOUNT DUE FROM BORROWER: |
| 101.
Contract sales price |
100,000.00 |
| 102.
Personal Property |
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| 103.
Settlement charges to borrower (line 1400) |
4,000.00 |
| 104. |
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| 105. |
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Adjustments for items paid by
seller in advance |
| 106.
City/town taxes to |
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| 107. County
taxes to |
|
| 108.
Assessments 6/30 to 7/31 (owners assn.) |
40.00 |
| 109.
Fuel Oil 25 gals. @ $1.00/gal. |
25.00 |
| 110. |
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| 111. |
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| 112. |
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| 120.
GROSS AMOUNT DUE FROM BORROWER |
104,065.00 |
Assume in this example, the cost of
the house is $100,000 and the borrower's total settlement charges
brought from Line 1400 of Section L are $4,000. Assume that the
settlement date is July 1. Here the borrower has agreed to pay the
seller for the $40 Home Owners Association dues that have been paid for
the month of July and for the 25 gallons of fuel oil left in the tank.
This is added for a gross amount due from the borrower of $104,065.
Section 200 lists the amount paid by the
borrower or on behalf of the borrower. This will include the deposit of
earnest money you put down with the agreement of sale, the loan(s) you
are getting and any loan you may be assuming.
Beginning at Line 210, adjustments are
made for items that the seller owes (such as taxes, assessments) but for
which you as the borrower will pay after settlement. The seller will
usually pay you or credit you this portion at settlement.
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200. AMOUNTS PAID BY OR IN BEHALF OF
BORROWER: |
| 201.
Deposit of earnest money |
2,000.00 |
| 202.
Principal amount of new loan(s) |
80,000.00 |
| 203.
Existing loan(s) taken subject to |
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| 204. |
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| 205. |
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| 206. |
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| 207. |
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| 208. |
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| 209. |
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Adjustments for items unpaid by
seller |
| 210.
City/town taxes to |
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| 211. County
taxes 1/1 to 6/30 $1,200/ year |
600.00 |
| 212.
Assessments 1/1 to 6/30 $200/yr. |
100.00 |
| 213. |
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| 214. |
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| 215. |
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| 216. |
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| 217. |
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| 218. |
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| 219. |
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| 220.
TOTAL PAID BY/FOR BORROWER |
82,700.00 |
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In this example, assume the borrower
paid an earnest deposit of $2,000 and is getting a loan for $80,000. A
tax of $1200 and an assessment of $200 are due at the end of the year.
The seller will pay the borrower for six months or one-half of this
amount. Line 220 shows the total $82,700 to be paid by or for the
borrower.
Section 300 reflects the difference
between the gross amount due from the borrower and the total amount paid
by/for the borrower. Generally, line 303 will show the amount of cash
the borrower must bring to settlement.
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300. CASH AT SETTLEMENT FROM/TO
BORROWER |
| 301. Gross
Amount due from borrower (line 120) |
104,065.00 |
| 302. Less
amounts paid by/for borrower (line 220) |
(82,700.00) |
| 303.
CASH (x FROM) ( _ TO) BORROWER |
21,365.00 |
In this example, the borrower must
bring $21,365.00 to settlement. |
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