Florida Broker Practice Exam

When must the settlement statement (HUD-1) be provided to the borrower?

1. At the time of loan approval

2. One business day before closing

3. At or after closing

4. Within two days of loan application

The correct answer is: One business day before closing

The settlement statement, commonly known as the HUD-1, must be provided to the borrower one business day before closing. This requirement ensures that the borrower has adequate time to review the document, which outlines the final terms and costs associated with the mortgage transaction. The HUD-1 details all fees, adjustments, and the final settlement amount, allowing the borrower to understand what is being charged and what funds they should prepare for closing. Providing the settlement statement a day in advance facilitates transparency in the transaction and helps prevent any last-minute surprises that could delay the closing process. The timing for delivering the HUD-1 is critical in ensuring the borrower's ability to evaluate their financial obligations prior to committing to the transaction.