During the process of buying a home, chances are you’ve come across something called the HUD-1 Settlement Statement – an incredibly important form used to itemize all of the costs paid at closing. Fortunately, this form has recently been replaced by an enhanced version known as the Closing Disclosure.

Why was this change made and how does it benefit homebuyers?homebuyer reviewing paperwork

The Closing Disclosure replaced the HUD-1 form as the standard form

If you purchased a home before 2015, you may be familiar with the HUD-1 form as your closing disclosure. Replacing the HUD-1 as the standard form in 2015, the new closing disclosure simplifies the paperwork needed to buy a home. Although the HUD-1 got replaced as the primary form for purchasing a home, you will still receive it if you apply for a reverse mortgage* or refinance your existing mortgage.

The consolidation of forms streamlines the buying process

Before the Closing Disclosure became the standard form, buyers had four disclosures to review:

  • Good Faith Estimate
  • Initial Truth in Lending Disclosure Statement
  • HUD-1 Settlement Statement
  • Final Truth in Lending Disclosure Statement

After consolidation, these forms were turned into the Loan Estimate and the Closing Disclosure.

The Loan Estimate combines and replaces the Good Faith Estimate and the initial Truth-in-Lending Disclosure statement and highlights the most important elements of the transaction. This makes it easier for borrowers to review information like loan terms, projected payments, and closing costs, as well as compare that information to other lenders.

The Closing Disclosure combines and replaces the HUD-1 Settlement Statement and the final Truth-in-Lending Disclosure statement. This form provides you with the same information as your loan estimate, but finalized.

The Closing Disclosure makes it easy to understand the final costs of your loan

Getting the right mortgage can help you save money and make your home a more affordable purchase, but you must understand all the costs associated with the process. Fortunately, the Closing Disclosure makes it easy to keep track of every charge associated with your mortgage. All lenders must provide one of these forms, which lists all the charges and closing costs you’ll need to pay, ranging from loan origination fees to title and transfer fees.

As long as you check these costs and ensure everything is correct, the Closing Disclosure is an important tool for understanding exactly how much your mortgage loan will cost so you can be comfortable with your payments for the life of your loan.

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* does not currently provide reverse mortgages. For more information, please visit us at

The above information is for educational purposes only. All information, loan programs and interest rates are subject to change without notice. All loans subject to underwriter approval. Terms and conditions apply. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.