Closing Time: Comparing the HUD-1 to the GFE

One of the many important tasks at closing is to compare your HUD-1 to your GFE, or Good Faith Estimate. In this week’s blog, we’ll talk about what to look for on both documents and what to do if there are any discrepancies.


HUD-1 vs. GFE

Your HUD-1 is the document that itemizes all of the financial transactions that are happening between every party involved in the transfer of the property. This is prepared by your closing agent and given to you one day before closing. The good faith estimate is given to you much earlier in the process and serves as a general estimate of the costs you’ll incur in your purchase of the home.

Parts of the GFE Can Change

There are some figures that can change from the GFE to the HUD-1. Some are limited to a maximum increase of 10%, for example. Others can change more than that. Some figures are not allowed to change. The GFE is included on page 3 of the HUD so you can compare figures. Here’s what’s allowed to change, and what’s not.

Figures that Cannot Change

  • Origination charge
  • Your credit or charge (points) for the specific interest rate chosen (after the rate is locked in).
  • Adjusted origination charges (after the interest rate is locked in).
  • Transfer taxes

Figures that Can Increase by Up to 10% at Closing

  • Government recording charges
  • Owner’s title insurance (if you use a company the lender identified).
  • Required services selected by the lender.
  • Title services and lender’s title insurance (selected or identified by the lender).
  • Required services you can shop for (if companies you use are identified by the lender).

Charges that Can Change at Closing

  • Daily interest charges
  • Homeowner’s insurance
  • Initial deposit for your escrow account
  • Owner’s title insurance (if you don’t use a company the lender identifies).
  • Title services and lender’s title insurance (if you don’t use a company the lender identifies).
  • Required services you can shop for (if you don’t use a company the lender identifies).

If You Find an Unexpected Charge or Increase

If at or prior to closing you find an unexpected charge of fee increase from the GFE to the HUD-1 that is not consistent with the information above, tell your attorney or escrowee immediately. If you don’t notice an error until after closing, you should still tell your attorney or escrowee, or contact the lender directly. “Your lender should address any concerns about unlawful increases in settlement fees right away, because it is legally obligated to reimburse you for these. If your loan or closing officer does not help you, ask to speak to someone in the compliance department,” according to NOLO.


Real Estate Closing Services from Colony Title Associates

Colony Title has been in business since 1995 and handles more than 2,000 real estate closings per year. If you have any questions or would like to speak to a representative about closing, please give us a call at 410-884-1160 or visit our website for more information.

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