A settlement statement is a standard form used at nearly all home loan closings. It lists all of the closing costs and charges and shows how the loan proceeds are paid out and who will receive them. It is sometimes referred to simply as the "HUD-1".

When Will I First See a Settlement Statement?

The final settlement statement is presented at loan closing. By law, you have a right to see a copy of a completed settlement statement during the business day immediately before the day of the loan closing. It is a good idea to ask to see a copy of a completed settlement statement or HUD-1 one business day before the loan closing. This will give you time to ask the lender or broker questions about charges and fees and about disbursement of loan proceeds. Be sure you are fully aware of all the details and be sure the lender is not overcharging on anything.

What Should I Look for in a Settlement Statement?

Review the fees in the settlement statement to make sure you are not being overchanged. You should compare the fees listed in the settlement statement with the estimates of the fees disclosed in the Good Faith Estimate. If there are significant differences in the numbers, or if any of the numbers in the settlement statement are higher, you should question these fees and find out why the numbers are different.  

You should also review all the proposed loan payoffs and other payments being made from the loan proceeds to be sure that the existing credit being paid off is what you expected, is what you owe, and what you agreed to. Check all of the information on the settlement statement and be sure it is accurate. Again, question anything that seems wrong.

Finally, be sure that all debts you want paid off are paid off and that the money you expect to receive will be paid to you.  

Do I Need an Attorney?

This is one of the final documents that will be needed before closing the loan and purchasing property. If you haven’t consulted a mortgage attorney, it is a good idea to have one do a final check of all your materials and papers to make sure your interests are protected.