Closing Statement: Definition and Tips for Writing Effective Statement

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A closing statement, also known as a HUD-1 statement or a settlement sheet, is a document used in real estate transactions that include an itemized account of all costs incurred by the buyer and seller. When it comes to purchasing a property, buyers may expect to receive a loan estimate within three days of applying for a mortgage. In this article, we are going to discuss in detail the hud closing statement, as well as some closing statement examples; this will also include the Adam Schiff closing statement.

What Is a Closing Statement?

A closing statement is a document that details a financial transaction. A bank presents a closing statement to a homebuyer who finances the purchase. While the home seller will receive one from the real estate agent who oversaw the sale.

A real estate agent prepares the closing statement, which is a settlement sheet.  It is a comprehensive list of all the costs that the buyer and seller must bear in order to complete the real estate transaction. Commissions, mortgage insurance, and property tax deposits are among the fees in this document. It also includes  Loan origination expenses, appraisal fees, inspection fees, and mortgage broker fees. It may also include fees for obtaining the borrower’s credit report, escrow funds, and title search fee. Also fees for services rendered by lawyers, notaries, and closing agents.

For transactions that use a real estate closing statement; the buyer and seller usually sit down with a professional such as a lawyer, real estate agent, or closing agent to review the statement and ensure everything is correct. Even after they prepare the statement, it might include last-minute changes that both parties need to review for accuracy. The statement lists the fees in two columns, one on the left side of the sheet for the buyer’s expenses and one on the right for the seller’s expenses. The amount of cash the buyer must give the seller has its own entry at the bottom of the document.

Hud-1 Closing Statement

The HUD-1 closing statement is a regular government form sent to borrowers who apply for federally insured mortgages on or before October 3, 2015. The HUD-1 itemized adjustments (such as tax charges, assessments, and settlement fees) to the amount due from the borrower or owing to the seller in a real estate transaction. As required by the Real Estate Settlement Procedures Act (RESPA). They also provide HUD-1, as well as the Truth in Lending Act (TILA) Disclosure Statement and the Good Faith Estimate.

The HUD-1 itemizes all costs in line with the transaction’s completion. The forms are examples of a standard real estate closing statement. In reverse mortgage and mortgage refinance transactions under federal law.

The legislation also requires borrowers to receive a copy of the HUD-1 at least one day before settlement. Though they can add figures, rectified, or modified until the parties are sitting at the closing table.

A real estate agent can review the form with the homebuyers, attorney, or settlement agent. Even if there is no loan involvement,  they usually refer to buyers as “borrowers” on the HUD-1 form.

Is HUD -1 Closing Statement Still in Use?

Generally, reverse mortgages and refinancing still use the HUD-1 forms. The government document that settlement agents use details all of the charges that borrowers and sellers are responsible for in any real estate transaction. In 2015, the HUD-1 form was superseded by the Closing Disclosure form.

While the HUD-1 has been phased out for conventional mortgage applications. They still use reverse mortgages, which allow people over the age of 62 to borrow against the equity in their house without having to make monthly mortgage payments. Furthermore, a lender may request an old HUD-1 settlement statement as confirmation that a property shut during a specific time period following a short sale prior to 2015.

The TILA-RESPA Integrated Disclosure (TRID) laws modified the typical mortgages process by integrating the TILA and RESPA forms into two separate disclosures. Borrowers of most closed-end consumer mortgages will get a loan estimate and a closing disclosure instead of a HUD-1 closing statement beginning in October 2015.

What Information Is in a HUD-1 Form?

Apparently, a review must be the HUD-1 or the reverse side, first. The opposite side is split into two-column. The left column lists the borrower’s charges, and the right column lists the seller’s charges.

Charges pertaining to the mortgage are also on the borrower’s list, such as a loan origination fee, discount points, payment for a credit report, and appraisal and flood certification fees. It may also include any prepaid interest costs, homeowner’s insurance fees, property taxes, title insurance for the owner and lender, and closing agency expenses.

The selling list may also include real estate commission, any agreed-upon buyer credit, and mortgage pay-off details. The seller’s itemized charges are typically lower than the buyer’s charges.

The figures on the HUD-1 verso (back page) are summed up and carried to the form’s recto (front side). The quantity of cash that the borrower must pay and the amount that the seller must pay we be at the bottom of the first page.

Closing Statement Examples

If there is a closing statement in a real estate transaction, both the buyer and seller should receive it at least one day before the deal closes. However, on certain occasions, it is not available until a few hours before the close. Both parties will have a full and itemized record of everything they will pay in order to complete the transaction. They should know where all of the money is going and how much they spend as well. Below are examples of a closing statement.

  • The mortgage closing statement
  • The loan-specific closing statement
  • The seller-specific closing statement

The Mortgage Closing Statement

One of the last actions a borrower must take before signing on the dotted line and accepting the money for a mortgage or refinancing is to read and accept the final closing disclosure.

The loan estimate, which estimates the different fees and additional charges that the borrower will encounter at closing, comes before the final closing disclosure. The final closing disclosure should not differ much from the loan estimate. When you submit the loan application, you can obtain the loan estimate within three days.

The borrower must receive the final closing disclosure at least three working days before closing. It includes a full summary of all fees and charges that the borrower will pay, as well as who will receive them. They will also deduct any costs already paid by the borrower and also the total amount the borrower is owing.

For easy reference, the final disclosure will show all of those data alongside the initial loan estimate. It will also include loan information such as the interest rate, monthly payment amount, and payment schedule.

It’s important to go over the mortgage closing statement carefully to ensure that everything is proper and to look for any anomalies.

The Loan-Specific Closing Statement

Almost every other type of loan has its own closing statement examples as settlement sheets or credit agreements.

The closing details of a revolving credit loan, such as a new credit card or a bank line of credit. They also report in the credit application, with the borrower’s signature showing advance agreement to the lending terms. Personal loans involving a significant lump payment, with or without collateral, typically require a more elaborate agreement. 

You would not receive the standard closing disclosure if you already have a reverse mortgage. Also, you will get a HUD-1 Settlement Statement and a Truth in Lending Disclosure form. You may receive a Truth in Lending Disclosure form if you apply for a home equity line of credit (HELOC). But not a HUD-1 Settlement Statement or a Closing Disclosure. Also, note that the Truth in Lending Disclosure Statement contains critical information about the cost of credit, including your annual percentage rate (APR). These are some of the real estate closing statement examples.

The Seller-Specific Closing Statement

The seller will receive the final closing documents that the settlement agent working with the title, including the Closing Disclosure to finalize the transaction. This will include a list of all commissions and fees that you will pay, as well as any credits they will allocate to them. The ultimate amount is what the seller will receive once the transaction is complete. The Consumer Financial Protection Bureau requires that the seller receives the statement.

For both buyers and sellers in a real estate transaction, the American Land Title Association (ALTA) publishes sample closing statements. These statements appear to be similar, yet there are some minor variances in the facts. Below are examples of a seller’s closing statement. The buyer closing statement, as well as the selling statement.

Tips for Preparing Closing Statements

Real estate transactions are one of the most challenging processes because of minor property details that most people are unaware of. Let’s go over some specifics and ease the process of creating real estate documents using the following pointers:

  • Check Each Party’s Rights Twice. Before producing a document, ensure that all of them have the necessary competencies to make property decisions.
  • Use Real Estate Contracts That Are Specific to Your State. The rules for documents vary from one state to the next. 
  • Determine All Necessary Terms. Putting a Closing Form into effect is frequently a stumbling point; resulting in numerous misunderstandings and litigation between parties. Make your start dates clear from the start.
  • Keep a record of the state of your residence. Take photos of the condition of a property or flat and confirm that everything is in working order on the date of release to the counter-party.
  • Make use of contemporary technologies. Use the available connectors with a professional PDF editor and an advanced eSignature solution to save time. 

Below is a sample of a Closing Statement presented by Adam Schiff on the impeachment of President Trump.

Adam Schiff Closing Statement

On Thursday, January 23, 2020, Adam Schiff gave an emotional closing statement at the Senate Impeachment Trial of Donald Trump. He described Donald Trump as “dangerous” and criticized him for prioritizing Rudy Guliani over US intelligence services.

Adam Schiff, as chair of the Intelligence Committee, was a key investigator in the impeachment investigation into Donald Trump coming from the Trump-Ukraine affair.

Adam Schiff in his closing statement said that “If the right isn’t important, it doesn’t matter how good or horrible the constitution is. “It makes no difference how great framers were”. “There is no difference in how good or horrible our advocacy in this trial is. It makes no difference how well-written the impartiality oath is. We’re lost if the right doesn’t matter. We’re lost if the truth doesn’t matter.

Adam Schiff continued in his closing statement, stating that President Trump can’t be trusted to “do what is right for the country” and that he’ll only “do what’s right for himself” because he’s done it before. Adam Schiff in his closing statement appeared to get choked up as he called on senators to convict the president. “This is why, if you find him guilty, you must expel him. “Because what’s right is important”

Finally, Adam Schiff concluded in his closing statement. “Because what’s right is important and the truth is important. Otherwise, we are lost

Closing Statement FAQs

What is a strong closing statement?

The closing statement is the attorney’s final statement to the jury before deliberation begins. The attorney restates the key points, outlines what the evidence has and has not proved, and asks the jury to examine the evidence and apply the law in his or her client’s favor.

How long is a closing statement?

Each closing argument typically lasts 20-60 minutes. Some governments limit the length of the closing, while others allow for some of that time to be kept for later.

What is the purpose of a closing statement quizlet?

The purpose of a closing statement is to summarize and simplify the financial transaction.

What is a settlement statement quizlet?

A document that provides a final, thorough accounting for a real estate transaction. Detailing each party’s debits and credits as well as the amount each will receive or pay at closing.

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