|
| |
B. Calculating the Amount You Need at Settlement
-
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 gal. @ $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 Owner 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.
|
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/yr.
|
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
|
-
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.
-
In this example, assume the borrower paid an
earnest deposit of $2,000 and is getting a loan for $80,000. A tax of $1,200 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
|
|
