A List of Charges Commonly Used in the Real Estate Closing Process

A List of Charges Commonly Used in the Real Estate Closing Process

Note: As of August 1, 2015, the HUD-1 and HUD1-A settlement statements (closing statements) were replaced by the newly designed TILA RESPA Closing Disclosure and Loan Estimate forms.

The Preliminary Closing Statement

Sales associates may be asked by their brokers to provide an estimate of closing costs to the sellers at the time of listing as well as an update when a sales contract is received.  Licensees may also be asked to provide buyers with anticipated closing costs.

A preliminary settlement closing statement provides an overview of the costs for the seller and buyer to close on a property.  Statements may be calculated using a spreadsheet or by a worksheet.  These preliminary statements are typically issued prior to closing by the settlement agent (a.k.a. closing officer or agent) who conducts the closing on the creditor’s behalf, utilizing the TILA RESPA Closing Disclosure and Loan Estimate Form (see link below for the model form example) for your inspection and review prior to closing. Make sure to review and compare the completed loan information on this form to the “original loan estimate” given to you from your mortgage lender to make sure that there are no input errors.

The settlement agent must permit the borrower to inspect the settlement statement, completed, during the business day immediately preceding (before) settlement. Items related only to the seller’s transaction may be omitted from the buyers copy prior to closing. FYI – Even if there is no creditor (mortgage company, etc) involved, you may request a preliminary settlement statement to be created by the settlement agent and issued to you prior to closing for your inspection and review of your estimated closing items and costs, as related to your real estate transaction under contract, prior to its closing.

Here is a link to the blank TILA RESPA Integrated Disclosure Consumer Finance.gov Closing Disclosure and Loan Estimate H25-A Model Form for your reference: https://files.consumerfinance.gov/f/201403_cfpb_closing-disclosure_cover-H25A.pdf

The form TILA RESPA H25-A is a general form and may be modified due to specific transactions utilizing Appendix H to Part 1026 - Closed-End Model Forms and Clauses: https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1026/H/ 

Disclosure:

The information submitted above was compiled and written by Kathryn Dean, Texas Real Estate Agent, License #0683656, on September 14, 2020, for her personal real estate information blog in order to give real estate advice and opinions to the general public.  Please make sure to fact check any real estate information provided in Kathryn's blog for accuracy, as real estate regulations are subject to change and/or be modified by the specific regulatory agencies that create them at any time.

References:

1. Consumer Finance Protection Bureau at http://www.ConsumerFinance.gov referenced on September 14, 2020.
2. Real Estate Express Online Education, list of charges commonly used in the real estate closing process, Florida Real Estate License Course 2020, as referenced on September 14, 2020.
3. Relocation America International Online Article: https://reloreview.wordpress.com/2015/04/24/new-disclosure-forms-to-replace-standard-hud-1-settlement-statement