Learn About The Difference Between a CD and a HUD.
The CD (Closing Disclosure) and HUD (Housing and Urban Development) are two types of settlement statements that are used in real estate transactions to outline the final costs associated with the sale. While both documents serve a similar purpose, there are some key differences between the two.
The Closing Disclosure is a settlement statement that was introduced by the Consumer Financial Protection Bureau (CFPB) as part of the TILA-RESPA Integrated Disclosure (TRID) rule. It is a five-page document that outlines all of the final costs associated with the sale, including the loan terms, closing costs, and other fees. It is typically prepared by the lender and is provided to the buyer at least three days before the closing date.
The HUD-1 is a settlement statement that was previously used in real estate transactions before the introduction of the Closing Disclosure. It was prepared by the title company or settlement agent and outlined all of the final costs associated with the sale, including the loan terms, closing costs, and other fees.
The main differences between the Closing Disclosure and the HUD-1 are:
Format: The Closing Disclosure is a five-page document with a standardized format that is easier to read and understand than the HUD-1.
Timing: The Closing Disclosure must be provided to the buyer at least three days before the closing date, while the HUD-1 could be provided at the closing.
Cost breakdown: The Closing Disclosure provides a more detailed breakdown of the costs associated with the sale, including itemized costs for each party, while the HUD-1 provides a more general breakdown of costs.
In summary, the main difference between the Closing Disclosure and the HUD-1 is that the Closing Disclosure is a newer, standardized document that provides a more detailed breakdown of the costs associated with the sale and must be provided to the buyer at least three days before the closing date. The HUD-1 is an older document that provided a general breakdown of costs and could be provided at the closing.