Which document details all settlement costs, including lender charges?

The HUD-1 form is a detailed document that outlines all settlement costs associated with a real estate transaction, specifically for federally related mortgage loans. This form itemizes each cost incurred during the closing process, including lender charges, settlement fees, and the pro-rated property taxes, allowing the borrower to see a complete picture of what they owe at closing.

The importance of the HUD-1 form lies in its comprehensive nature; it provides borrowers with the ability to compare the estimated costs they received in the Loan Estimate to the final costs at closing. This transparency is crucial in fostering understanding and trust between lenders and borrowers.

In contrast, the agreement of sale generally outlines the terms of the purchase or sale of a property but does not detail specific settlement costs. Form 1003 is the standard loan application form that collects the borrower's financial information, but it does not serve to itemize settlement expenses. Lastly, a forbearance agreement is a legal document that outlines the terms of temporarily changing the mortgage repayment schedule, with no relevance to the settlement costs incurred in a transaction.

Thus, the HUD-1 form is the essential tool that fulfills the need for accurate documentation of all settlement costs involved in the mortgage process.