By now, your lender should have emailed you the official HUD-1, which they are required to do at least 24 hours before closing. We’ll go through this line by line to make sure there aren’t any surprises. If there are, you will need to contact your agent and your lender immediately, because you must resolve them before the closing date.
There are three areas in particular we need to review extra carefully, so find Sections J and K, and let’s go through each.
View a Sample HUD-1
Section J: Summary of Borrower's Transactions
We’re starting in the 100s, which is all about the money you need to pay.
- 101. Contract sales price
- 102. Personal property
- 103. Settlement costs
- 106 - 112. Adjustments for items paid for by seller in advance
- 120. Gross amount due from borrower
Now let’s move to the 200s, which are all about credits going back to you, the buyer, which will likely reduce that gross amount above.
- 201. Deposit or earnest money
- 202. Principal amount of new loan
- 203. Existing loans taken subject to
- 204 - 209. Miscellaneous
- 210 - 219. Adjustments for items unpaid by seller
- 220. Total paid by/for borrower
In the 300s, the credits due to you is subtracted from the amount you owe, which leaves you with the total amount you must bring to closing. In this case, while you still owe your mortgage, it is considered a “credit” because your lender is paying that portion of the cost of the home (for now).
Section K: Summary of Seller's Transactions
This section is similar to Section J, but in this case it lists everything owed to the seller, not to you. That said, it does concern you, so you should go through each line to make sure it makes sense to you. This section may also include other seller obligations, including charges that were disclosed on the GFE but that are actually being paid for by the seller.