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:
|
J.
SUMMARY OF BORROWER'S TRANSACTION |
| 100.
GROSS AMOUNT DUE FROM BORROWER: |
|
101. Contract sales price |
100,000.00 |
|
102. Personal Property |
|
|
103. Settlement charges to borrower (line 1400) |
4,000.00 |
|
104. |
|
|
105. |
|
| Adjustments
for items paid by seller in advance |
|
106. City/town taxes to |
|
|
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. |
|
|
111. |
|
|
112. |
|
| 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.
| 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 |
|
|
204. |
|
|
205. |
|
|
206. |
|
|
207. |
|
|
208. |
|
|
209. |
|
| Adjustments
for items unpaid by seller |
|
210. City/town taxes to |
|
|
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. |
|
|
214. |
|
|
215. |
|
|
216. |
|
|
217. |
|
|
218. |
|
|
219. |
|
| 220.
TOTAL PAID BY/FOR BORROWER |
82,700.00 |
| |
|
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.
| 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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