How To Distinguish "Prepaid Items" From "Closing Costs" When Reviewing A HUD-1 Settlement Statement

Smart people sometimes feel less-then-smart when reviewing a mortgage settlement statement for the first time.

It's not that the math is tough -- it's the lack of understanding about what you're looking at and what it all means.  Mortgage Math isn't taught in school, after all.

As a result, the first time that many people see a "live" settlement statement is on the day they buy their first home and that's a bad thing. 

Not understanding what your settlement statement says can make a closing go bad faster than Vantage Point did.

I've seen enough closings to know that the one settlement statement area that constantly throws homeowners for a loop are the sections collectively known as "Prepaid Items".