What is the significance of the HUD-1 Settlement Statement?

The HUD-1 Settlement Statement plays a crucial role in real estate transactions, particularly for buyers and sellers during the closing process. It provides a comprehensive breakdown of all closing costs involved in the transaction, listing each fee associated with the purchase of a property. This detailed account helps both parties understand the financial aspects of the transaction, ensuring transparency and clarity. By outlining various expenses, such as loan origination fees, title insurance, and escrow fees, the HUD-1 allows buyers to see exactly what they are paying and helps them prepare for the final costs associated with their new home.

In contrast, other options do not align with the core function of the HUD-1. The document is not a requirement solely for mortgage applications, nor is it used for estimating property taxes or outlining loan agreement terms. Its primary focus is on detailing closing costs, making it an essential resource during the conclusion of a real estate deal.