Real Estate Transactions: Don’t Work Without A Net (Mortgage)

Real estate transactions are not simply money going from the buyer to the seller. A host of payments must be made to other parties including government agencies, insurance companies, home inspectors…oh and you too. You need to not only keep track of all these charges that come off the HUD 1 but must also determine if the fees have already been paid as part of the mortgage, or will be paid separately by checks you need to mail out. Our HUD settlement statement software takes the tedium and guesswork out of this disbursement process so you stop worrying about making sure everyone gets paid.

When you fill out the HUD 1 forms with our software, you’ll notice that a number of the lines include a check box labeled Net. As you enter numbers into the form, you can mark any of these boxes to indicate the fee has been netted. That means the fee is rolled up into the gross mortgage and has already been disbursed.

Several of the boxes are automatically checked on the HUD-1 form to reflect fees that are commonly included in mortgages. These include origination charges, items required to be paid in advance by the lender, and initial escrow deposits made with the lender. Any of these can be unchecked if for some reason they were not included in the mortgage. Any prepaid fee marked with a Net box on the HUD forms can be checked and the software will adjust the net mortgage accordingly.

To see the result of the net fees, either press Ctrl-L or click “Tools > Lender Worksheet” in the menu at the top of the screen. Either of these commands brings up the Lender Worksheet. This lists the gross mortgage amount, all items added or deducted by the lender as indicated by the checked Net boxes, and the net mortgage amount. All values are taken from the HUD 1 and the calculations are performed by the software so you now the final net mortgage value is accurate.

What about items not netted? Those are handled by the ledger module, which we’ll explore in another entry.

The advantage of using HUD software like Easy HUD is that you have to enter the information only one time. Values are automatically copied to other locations such as the Lender Worksheet and the software takes care of the calculations more quickly and accurately than would be possible with manual calculation.

Accuracy is critical in real estate closing process and you can’t afford to make even innocent mistakes. Don’t trust your HUD-1 form to error-prone manual completion or to software not dedicated to the real estate market. Trust Easy Soft products to do the work quickly, efficiently and accurately.