The HUD-1 Settlement Statement is one of the most important loan documents you will encounter when taking out a mortgage loan. The information on your HUD-1 can make the difference between getting a good home loan and overpaying thousands of dollars.
The HUD-1 Statement shows buyer fees, seller fees, lender fees, broker fees and markup and any third party closing costs. If you are refinancing your mortgage loan, you and your closing agent will be the only ones signing the HUD-1 statement. While the Good Faith Estimate is a weak approximation of what you can expect to pay for your mortgage loan, the HUD-1 is the final word on what you will pay. Good Faith Estimates have become little more than a marketing tool to attract borrowers with bait-n-switch tactics.
One of the most important items you’ll find on your HUD-1 is Yield Spread Premium, or the mortgage broker rebate. This is a fee paid to the broker by the lender for marking up your mortgage rate. If there is any Yield Spread Premium associated with your mortgage you can be sure that you’re paying more than you should. You can learn how to avoid Yield Spread Premium and other junk fees by registering for the free mortgage videos on this site.
My name is Rob Regehr and I’m a personal finance writer with a chip on my shoulder for banks and brokers that take advantage of my friends and neighbors.
