The HUD-1 Demystified

As the settlement date approaches, a big question on a potential borrower's mind is, "How much will I need to bring?"

All of the closing costs are summarized on the HUD-1 Settlement Statement, and fees will be from a variety of sources. The lender will have certain fees for providing a mortgage, and if a broker is used he or she will certainly have fees as well. Plus, there could be items such as a survey or termite certification, and last, but not least, the settlement and title insurance fees from the title company.

Because every mortgage company and transaction is different, it is impossible for the title company to know all of a borrowers' fees in advance. However, we can let you know what our fees are going to be for a transaction. Most of our fees are fairly fixed; the Title Insurance Premium is based on the loan amount.

Below is a list of typical closing costs that we will charge on a transaction, along with an explanation for each. As you can see, most of our costs are fairly easy to calculate or predict, with the exception of Title Insurance. We include the examination fee, search fees, and endorsements into the the title insurance premium, so the amount shown on the HUD will be different from the amount calculated using a rate sheet.

HUD Fee	Cost	Explanation
Settlement/Closing Fee	$300-325	Our Settlement Fee. In South Jersey this is usually split between the Buyer and Seller. Closings in our office are $300 split between both parties, out of the office is $325. For a refinance the buyer is responsible for the entire fee.
Notary Fee	$15-40	This goes to whoever notarizes your documents. The buyer is charged $25 for notarizing the mortgage package. The seller is charged $15 for notarizing the deed. If there is a quitclaim deed on a refinance, the borrower will be charged a total of $40.
Title Insurance	varies	This is the premium for Title Insurance. This varies on the purchase price or loan amount for a refinance. Included with the premium are county, tax, and Superior Court searches, examination fee, and applicable endorsements.
Copy/Electronic Transmittal	$0-50+	This is charged if we have to make copies of the loan documents for the borrower and/or if we receive the package via email. If there is also a 2nd mortgage this will be charged for that also. The charge is $25 for each copy made or package received electronically.
Recording Fees	$260+	This is amount the County Clerk charges to record mortgages and deeds, and release mortgages of record. Releases are $75 and the borrower only pays for these on a refinance. For a purchase the borrower pays to record their mortgage (~$185, if 15 pages) and the deed (~$75, if 4 pages). If there is also a 2nd mortgage, that will be added in also. If the actual documents are more or less pages than these estimates, add or subtract $10/page.

This sums up estimated Title Company closing costs on the buyer's side of the HUD. Other things which will effect the buyer's costs are tax prorations, lender fees, lender escrows, and other costs such as taxes paid in advance, survey, termite certification, other certifications required by the lender, Homeowner's Insurance, and a host of other fees which may or may not be associated with a particular transaction.


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