A closing disclosure (“CD”) and a HUD are both forms of settlement statements. Settlement statements show all the fees, closing costs, cash to close, sale proceeds, and other financial information involved in a real estate transaction.
A CD and HUD differ in that they have different formats, layouts, and a CD provides more information about financing. Lenders generally prefer to use CDs because they offer more detailed information about the terms of a loan. CDs are usually a five-page document that lists the loan terms, projected payments related to the loan, closing costs, and loan costs. In a CD, you will see your projected monthly payments, interest rate, length of loan term etc. A HUD does not contain much details about your loan.
A HUD is usually a three-page form that lists the closing and loan costs. The first page is a summary of the total costs to buyer and seller along with the cash to close and cash to seller. The second page details the specific costs to buyer and seller. The third page is a signature page.
Because of the differences between a CD and HUD, a HUD is usually used for cash transactions and a CD is usually used in a transaction involving a loan.
Leave a Reply