Explore the essentials of a closing statement, including its role in itemizing transaction costs and loan details and ensuring deal transparency.
A "Closing Statement," also known as a "Settlement Statement" or "HUD-1" (for transactions before October 3, 2015), is a comprehensive document provided to both the buyer and seller after a real estate transaction. This document itemizes all the financial transactions and fees involved in closing. The Closing Disclosure has largely replaced the HUD-1 for most residential real estate transactions due to changes implemented by the Consumer Financial Protection Bureau (CFPB). However, "closing statement" still broadly refers to the document summarizing the transaction's financial details.
The closing statement is critical for buyers and sellers as it provides a clear and final accounting of all the financial transactions involved in the real estate deal. It ensures transparency and accuracy in the closing process, allowing both parties to verify that all calculations are correct and agreed-upon financial obligations have been met.
If discrepancies or errors are found in the closing statement, it's important to address them immediately with your real estate agent, attorney, or the closing agent. Corrections should be made before signing to ensure all financial details accurately reflect the agreed-upon terms of the transaction.
Yes, buyers and sellers are typically entitled to receive a copy of the closing statement for review at least one to three days before the closing date. This allows time to understand and question any items listed, ensuring clarity and accuracy before finalizing the transaction.
The closing statement can refer broadly to any document summarizing the final financial details of a real estate transaction. However, for most residential real estate transactions, the Closing Disclosure is the specific form used to itemize all charges and credits to the buyer and seller as per regulations that took effect after October 3, 2015. The Closing Disclosure has largely replaced the HUD-1 Settlement Statement for mortgage transactions.
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