Settlement Charges
(HUD – 1 page 2)
The second page of the settlement statement itemizes all settlement fees assessed to the Buyer and Seller. Note: Any items paid by the parties outside of, or prior to, closing, are shown as P.O.C. (Paid Outside of Closing).
Section 700: Real Estate Broker Fees
Line 701
Amount of Commission to be paid to Seller's Agent.
Line 702
Amount of Commission to be paid to Buyer's agent.
Line 703: Commission Paid at Settlement
Typically the total real estate commission will be paid by the Seller, less any deposit being held by the broker.
Line 704
This section will show any amount being held by the agents in reference to the earnest money deposit as P.O.C. (paid outside of closing).
Section 800: ITEMS PAYABLE IN CONNECTION WITH LOAN
All fees in this section are paid by the borrower in connection with their loan.
Line 801: Our Origination Charge
Includes all origination charges paid to the lender, except any charge for the specific interest rate chosen (points).
Line 802: Adjusted Origination Charge
Your credit or charge for the specific interest rate chosen.
Line 803: Your Adjusted Origination Charges
Relects the sum of lines 801 and 802 as the borrower’s adjusted origination charge.
Line 804: Credit Report
Cost incurred by the Lender for obtaining a credit report on the Buyer. This amount is usually paid by the Buyer at the time of the loan application.
Line 805: Lender's Inspection Fee
This Lender's charge applies when a Lender must re-inspect the property after repairs have been made. Some government loans require that the Seller pay this fee.
Line 806: Tax Service
This Lender’s charge applied when a Lender uses a specific company to handle the taxes held in your escrow account.
Line 807: Flood Certification
This Lender’s charge applies when the Lender needs to verify if the property is located in a flood zone.
SECTION 900: ITEMS REQUIRED BY LENDER TO BE PAID IN ADVANCE
Line 901: Interest
"Per Diem" (per day) interest on the new loan from the date of settlement to the end of the month in which the loan closes.
Line 902: Mortgage Insurance Premium
Most Lenders require mortgage insurance on conventional loans which exceed 80% of the purchase price or appraised value, whichever is less. This insurance, paid by the Buyer, protects the Lender against losses if the Buyer defaults on the loan. Lender's requirements vary. The Lender should inform the Buyer at the time of the loan application whether mortgage insurance will be necessary. On FHA loans, Buyers will be required to pay a one-time up front mortgage insurance premium in addition to the monthly mortgage insurance.
Line 903: Homeowner’s Insurance Premium
Most Lenders will require that a full years homeowner’s insurance premium is paid prior to, or at the time of settlement
SECTION 1000: RESERVES DEPOSITED WITH LENDER (i.e. Escrow)
Funds to cover these items are collected in advance from the Buyer and are held in escrow by the Lender to pay future obligations as they become due. The amounts collected at settlement depend upon the number of monthly payments to be made by the Buyer from the date of settlement until each charge is due.
Line 1001: Initial Deposit for your Escrow Account
This is the total from lines 1002-1007
Line 1002: Homeowner’s Insurance
This is usually paid by the Lender on an annual basis.
Line 1003: Mortgage Insurance
This is only required on loans with high “loan to value” ratios – that is where the loan amount is greater than 80% of the appraised value of the property.
Line 1004: Property Taxes
County and City taxes. Borrowers can now pay the real estate taxes on their principal residence on a bi-annual basis, which often reduces the amount of taxes to be collected at settlement. This only applies to the Borrower’s principal residence.
Line 1007: Aggregate Adjustment
The difference between the deposit required under aggregate accounting and the sum of the deposits required under single item accounting. By law, the Lender is not allowed to collect more than the initial payment. The Lender must “credit” the borrower at closing to avoid collecting more than the initial payment.
Section 1100: Title Charges
These fees are typically paid by the Buyer, except line 1002 which is specifically for the Seller.
Line 1101: Title Services and Lender’s Title Insurance
Includes all fees incurred by the settlement company to conduct the closing, plus the Lender’s title insurance premium. For example, settlement, abstract, title examination, courier , wire and commitment fees. Includes all of Section 1100 charges except 1103.
Line 1102: Settlement of Closing Fee
The fee charged by the title company to the Seller for settlement. (Closing fee, notary or wire fee).
Line 1103: Owner’s Title Insurance
The attorney’s fee to review the title abstract and to determine if the Seller has good title to convey. This is the only fee in this section not included in line 1101.
Line 1104: Lender’s Title Insurance
This is shown so the borrowers know how much of line 1101 consists of Lender’s title insurance.
Line 1105: Lender’s Policy Limits
The amount the title insurance premium is based upon.
Line 1106: Owner’s Policy Limit
The amount the Owner’s policy is based upon.
Line 1107: Agent’s Portion of Title Insurance
The amount of the title insurance premium being paid to the settlement company.
Line 1108: Underwriter’s portion of Title Insurance
The amount of insurance paid to the title insurance underwriter.
Line 1109, Line 1110 and Line 1111
These lines will be used for any third party charge. (This amount will also be included in line 1101.)
Section 1200: Government Recording and Transfer Charges
Line 1201: Government Recording Fees
This is a roll-up line used for the total from line 1202.
Line 1202:
Individual recording fees needed to record the Deed, Mortgage and Releases.
Line 1203: Transfer Taxes
This is a roll-up line for the totals on lines 1204, 1205 and 1206.
Line 1204: City, County Tax/Stamps (i.e. Recordation Tax)
Documentary Stamps are assessed on the purchase price or loan amount, whichever is greater.
Line 1205: State Tax/Stamps
State tax assessed on the value (i.e. sales price) of the property being transferred. Currently equal to .5% of the sales price.
Line 1206: County Transfer Tax
County tax assessed on the value (i.e. sales price) of the property being transferred. Currently not all counties in Maryland assess a county transfer tax.
Section 1300: Additional Settlement Charges
Line 1301: Required services that you can shop for.
This is where the survey, pest inspection, home inspection, well and septic fees will be collected. (Only if they were chosen from the list of providers.)
Line 1302:
Any fees collected that were not chosen from the Lender’s list of providers must be shown separately from the ones chosen from the list of providers. They would need to be shown differently to correspond with the Good Faith Estimate (GFE).