What is a Closing Statement, Settlement Statement?
A closing statement is a document that records the details of a financial transaction. A homebuyer who finances the purchase will receive a closing statement from the bank, while the home seller will receive one from the real estate agent who handled the sale.
Understanding the Closing Statement
When financing a home purchase, buyers can expect to see a loan estimate within three days of applying for a mortgage. Prior to closing, the buyer will receive the final Closing Disclosure. If you are the seller, you’ll receive a similar Closing Disclosure that reflects your information along with your rights and obligations as the seller.
The Mortgage Closing Statement
Reading and accepting the final Closing Disclosure is one of the last steps that a borrower must take before signing on the dotted line and accepting the money for a mortgage or refinancing.
The final Closing Disclosure is preceded by the loan estimate, which estimates the various fees and additional charges that the borrower will face at closing. The final Closing Disclosure should not vary significantly from the initial loan estimate. The loan estimate should be received within three days of submitting the loan application.
The final Closing Disclosure must be given to the borrower at least three business days before closing. It contains a detailed list of every fee and charge that the borrower will be required to pay, and to whom it will be paid. The gross amount due will be adjusted to reflect any costs already paid by the borrower.
The final disclosure will even present all of those figures side by side with the initial loan estimate for easy comparison. It also will include the details of the loan, including the interest rate, the amount of the monthly payments, and the payment schedule.
What Is a Settlement Statement?
A settlement statement is a document that summarizes the terms and conditions of a settlement agreement between parties.
Commonly used for loan agreements, a settlement statement details the terms and conditions of the loan and all costs owed by or credits due to the buyer or seller. It also details any fees that a borrower must pay in addition to a loan’s interest. Different types of loans have varying requirements for settlement statement documentation. Mortgage loan settlement statements, used in real estate transactions, are often referred to as closing statements.
Loan Settlement Statements
A settlement statement is part of a loan closing package provided to a borrower, usually from a loan officer at a lending institution. Commercial and personal loan borrowers work with a loan officer who presents them with the closing and settlement statement.
When Do I Receive a Settlement Statement for a Mortgage Loan?
When both parties agree to the terms and conditions of the settlement agreement, including all costs and fees, the closing will be scheduled and you will receive your settlement statement. Often, you will receive instructions from your settlement agent on how to deliver the money owed, and you’ll then attend the closing and provide the required signatures.
Is a Settlement Statement the Same as a Closing Statement?
Yes, a closing statement is commonly used to refer to the settlement statement in a real estate transaction.
Choice Mortgage Group
Choice Mortgage Group is dedicated to helping people improve their financial situations and create lasting memories through home ownership – one loan at a time. Our team of mortgage experts build customized solutions for each of our clients, based on their specific situations, goals, and objectives.
Specializing in residential mortgage lending for over 25 years, our programs include conventional and government lending, purchases, and refinances. We also offer portfolio lending for self-employed borrowers and borrowers with complicated tax situations.
South Florida is where Choice Mortgage Group started, and we like to call it home. We are devoted Florida Atlantic University Owls fans and are proud to be the official mortgage lender partner of FAU Athletics. We also support numerous other local organizations.
For more information about Choice Mortgage Group, visit www.choicemortgage.com.
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