Making Sense of Real Estate Closing Forms

You’re days away from closing on the sale or purchase of your home, and you receive a statement from your Mortgage Lender or Closing Attorney with A LOT of numbers on it… Here’s how to make sense of it.

What Are The Differences Between The Seller Closing Disclosure, Buyer Closing Disclosure, ALTA, and 1986 HUD-1 Forms?

Closing forms for a Real Estate transaction can be a bit confusing for first time buyers. While each of the following forms might not be used during your specific Real Estate transaction, it is important to understand their differences.

Sellers Disclosure Form

• Has separate forms for sellers and buyers. The forms are separate so that the seller doesn’t have access to sensitive buyer information.
• Contains a transaction section, which is similar to the old HUD-1 form and clearly denotes the transaction history.
• Within the closing cost section, the seller’s contributions will be listed, as well as any loan information or closing costs.

Closing Disclosure (TRID)

A five page form that details which mortgage loan was selected by the seller.

• Page one includes information on the loan terms and projected payments.
• Page two lists closing cost details.
• Page three is a summary of the transaction history and the cash needed to close.
• Page four details additional information about your loan.
• Page five provides the disclosure and contact information, as well as loan calculations.
  Note: this document is required for government backed loans.

ALTA Settlement Statement

• Clear, easy to understand form with seller information on the left and buyer information on the right.
• Each line of the first page of the ALTA settlement statement will show the credit or charge for the buyer or seller.
• Provides sign-off portion that allows the closing to be conducted and the funds to be clearly understood before they are appropriately distributed.
• The form includes a description for each line item, so that a “bottom line” number can be easily identified.

1986 HUD-1 Form

• Standard, government-issued form, used by the closing attorney
• Provides both the seller and the buyer (borrower) with an itemized list of incoming and outgoing funds.
• Typically used in cash purchases, reverse mortgage or refinance transactions.
• The left-hand column details the borrower’s charges, while the right side lists the seller’s charges.
• Borrower charges could include: mortgage fees, prepaid interest cost, property taxes, closing agent’s fees, homeowner insurance, and the title insurance.
• The seller’s charges could include: Real Estate commission fees, or any contractually agreed-upon fees that are owed to the borrower.

Your North Carolina Real Estate Agent should be familiar with each of the forms and help you with any questions you have.  Count on REALTOR Judy Jernigan and the House Into Home NC team to be your educator, advocate, and ally as you close on your home.