Money Saving Tips: Verify HUD Settlement Statement Before Signing

settlement statementThe HUD-1 Settlement Statement is the most important closing document you will sign and by law details all closing costs for both the borrower and seller. Request a copy of your settlement statement before close of escrow (COE), and go over it line by line.  Compare the Good Faith Estimate provided by your lender and be sure to check with your lender if there are discrepancies. Lenders are required to keep fees listed on the settlement statement within 10% of fees on the Good Faith Estimate.

At a recent closing on my new home I discovered the Title Company Escrow agent made several careless mistakes that could have cost me close to a thousand dollars.  My advice to anyone involved in a real estate transaction is to assume mistakes will be made and it is in your best interest to find and correct them before closing.

Some things to look for: 1) Check all calculations!  Simple math errors are not uncommon on settlement statements.  2) Verify tax payments have been made and are accounted for properly.  3) Verify 1st and 2nd mortgage payoff amounts are correct on settlement statement  4) And finally you and your Real Estate Agent should go over sales contract and any addendums and verify all concessions and payments made “outside of escrow” have been accounted for.

By keeping good records and verifying items on your Settlement Statement, you can ensure closing goes smoothly!



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Cindy at Midlife Finances has some great tips for those looking at purchasing a car: Buying a Car: The Basics 

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11 Responses to Money Saving Tips: Verify HUD Settlement Statement Before Signing

  1. Marie at Family Money Values 03/31/2013 at 3:16 pm #

    Thanks for the mention…Happy Easter!

    • Paul 03/31/2013 at 9:20 pm #

      Happy Easter to you Marie!

  2. Brick By Brick Investing | Marvin 04/01/2013 at 6:35 am #

    Some of the fees that are associated with the HUD are absolutely ridiculous. I agree you should go over it with a fine toothed comb before signing.

    • Paul 04/01/2013 at 7:30 pm #

      Unfortunately the escrow agent I used (recommended by my real estate agent) made two rather large mistakes. They failed to verify a tax payment and made a calculation error. Don’t assume calculations are correct!

  3. Tony@WeOnlyDoThisOnce 04/01/2013 at 6:36 pm #

    So true, unfortunately, about the need to double check. Great links!

    • Paul 04/01/2013 at 7:36 pm #

      I saved myself close to $1000 by checking each line item! I would have eventually got the property tax payment back but probably would have had to file with the appropriate tax authority. Would have been a major pain!

  4. Midlife Finance 04/04/2013 at 8:26 am #

    Thanks for the mention!

    • Paul 04/04/2013 at 7:35 pm #

      Our pleasure!

  5. Kay Lynn 04/04/2013 at 12:35 pm #

    I appreciate the tip to get the settlement sheet before the day escrow closes. That removes the stress of trying to get it fixed last minute.

    • Paul 04/04/2013 at 7:37 pm #

      There is enough stress as you mention Kay without having the escrow agent or notary waiting on you to check the accurateness of the settlement statement. By getting a copy the day before you can sit down with a cup of coffee and take your time!

  6. Catherine 04/09/2013 at 10:16 am #

    Thanks for including the Anne’s Guest post Paul!

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