How to Read a Settlement Statement in Virginia: A Line-by-Line Breakdown Using a Real Transaction
I help DMV buyers and sellers navigate real estate with the operational rigor most agents skip. HOA documents analyzed. County permit issues checked when available. Settlement statements challenged. Risks surfaced early so you can make stronger decisions with fewer surprises.
Most first-time buyers see their settlement statement for the first time at the closing table. That is too late. The ALTA Settlement Statement is the final accounting of every dollar in your transaction — what you owe, what the seller owes, where every fee goes, and what you need to bring to closing.
This guide walks through an actual settlement statement from a recent Arlington, Virginia condo purchase, line by line, in plain language, so you know exactly what you're looking at before you sign.
Download the full redacted settlement statement used in this walkthrough (PDF)
The Structure: Two Columns, Two Sides
The ALTA statement is organized into two parallel columns: Seller and Borrower (buyer). Each side has debits (money owed) and credits (money received or applied in your favor).
At the bottom, the math resolves into two numbers:
- Due from Borrower — your cash to close
- Due to Seller — what the seller walks away with
Everything between the top and bottom of this document is the explanation of how those two numbers were calculated. Your job is to verify that explanation.
The Financial Section
This is the top of the statement and the simplest part.
| Line | Seller | Buyer |
|---|---|---|
| Sale Price | $287,500 credit | $287,500 debit |
| Deposit | $10,000 credit | |
| Loan Amount | $230,000 credit | |
| Seller Credit | $7,500 debit | $7,500 credit |
| Lender Credits | $14.00 credit |
What to check
The sale price should match your contract. The deposit should match what you actually wired to escrow. The loan amount should match your final loan commitment. The seller credit should match what was negotiated in the contract.
The seller credit of $7,500 in this transaction was negotiated to help offset closing costs. This is common in Virginia, particularly when buyers negotiate a credit after inspections rather than asking the seller to perform repairs. A credit gives you flexibility to address issues with your own contractor after closing rather than relying on repairs completed before settlement.
Prorations: Splitting Costs by the Day
| Line | Amount | Period |
|---|---|---|
| Condo Assessments | $332.37 | 02/20/26 – 02/28/26 |
| County Taxes | $422.61 | 01/01/26 – 02/20/26 |
Prorations split recurring expenses between buyer and seller based on the settlement date. The seller owned the property from January 1 through February 19, so they owe property taxes for that period. The buyer owns the property beginning February 20, so they owe condo assessments for the remainder of the month.
What to check
Review the daily-rate calculation. County taxes and condo assessments should generally be divided by the appropriate number of days in the year and multiplied by the number of days allocated to each party. Errors here are usually small, but they can occur.
Loan Charges: Where Lenders Make Their Money
This is the section most buyers glaze over. Don't.
| Fee | Amount |
|---|---|
| Admin Fee | $725.00 |
| Processing Fee | $825.00 |
| Condo Review Fee | $250.00 |
| Appraisal Desk Fee | $50.00 |
| Tax Service Fee | $70.00 |
| Credit Report | $60.00 |
| Credit Valuation Bundle | $385.00 |
| Appraisal Fee | $650.00 (paid outside closing) |
Total lender-related charges: approximately $3,015.
What to question
The admin fee ($725) and processing fee ($825) together total $1,550 in lender overhead fees. These fees may be negotiable with some lenders, particularly before you lock your rate. Many lenders are willing to adjust fees to win business. Once you've locked your rate and are approaching closing, your leverage is often reduced.
The "Credit Valuation Bundle" at $385 is worth understanding. Ask your lender for a detailed explanation of exactly what services are included and whether any of those services are already listed elsewhere on the settlement statement.
The appraisal fee of $650 was paid outside closing, meaning the buyer already paid it directly earlier in the process. It appears on the statement for disclosure but does not add to cash to close. Verify that any fees you already paid are correctly marked as "paid outside closing" so you are not charged twice.
Prepaid Interest
| Fee | Calculation |
|---|---|
| Prepaid Interest | $38.60/day × 9 days = $347.40 |
This covers interest from your closing date (February 20) through the end of the month (February 28). Your first mortgage payment won't be due until April 1, covering the full month of March. This bridge payment covers the gap between closing and your regular payment schedule.
What to check
Verify the per-diem interest rate. Multiply the loan amount by the interest rate and divide by 365 to estimate the daily interest charge. Minor differences can result from rounding or rate variations, but large discrepancies are worth asking about.
Impounds (Escrow Reserves)
| Item | Amount |
|---|---|
| Homeowner's Insurance | 3 months × $35.08 = $105.24 |
| Property Taxes | 6 months × $251.11 = $1,506.66 |
| Aggregate Adjustment | -$105.24 |
Your lender collects escrow reserves upfront to ensure there is enough money available to pay future property taxes and insurance premiums when they come due.
The aggregate adjustment is a federally required correction designed to prevent lenders from collecting more escrow than permitted under RESPA. In this example, the credit offsets the insurance reserve and reduces the amount the buyer must bring to closing.
What to check
Compare the monthly property tax amount used for escrow calculations against the property's actual tax bill. If the numbers seem significantly different, ask your lender to explain the calculation.
Title Charges: The Section Most Buyers Ignore
| Fee | Amount |
|---|---|
| Settlement Fee (Buyer) | $1,275.00 |
| Title Search/Abstract | $275.00 |
| Lender's Title Insurance | $690.00 |
| Owner's Title Insurance | $422.20 |
| CPL (Closing Protection Letter) | $35.00 |
Total buyer title charges: $2,697.20.
The settlement fee is what the title company charges to coordinate the closing: preparing documents, managing funds, and conducting the settlement. $1,275 is within the normal range for Northern Virginia but is not fixed. Title companies compete on this fee, and shopping around before selecting a title company can save several hundred dollars.
Lender's title insurance ($690) protects your lender against title defects. This is required on virtually every mortgage transaction. The version here, ALTA Expanded Coverage, is an enhanced policy. Ask whether the expanded coverage was required by your lender or selected as an optional upgrade, and compare the cost difference with a standard policy.
Owner's title insurance ($422.20) protects you as the buyer against title defects. This is technically optional in Virginia but strongly recommended. Unlike lender's title insurance, this policy protects your equity, not the bank's.
What to ask about
Ask the listing agent, seller, or title company whether a prior owner's title policy exists for the property. If the property was purchased within the last several years, the title company may be able to issue a reissue rate, a discounted premium based on the prior policy. Not all title companies automatically identify potential reissue-rate eligibility, so it is worth asking. See What Title Companies Don't Tell You for more.
Commissions
| Fee | Amount | Paid By |
|---|---|---|
| Listing Agent Commission | $8,625.00 | Seller |
| Buyer's Agent Commission | $8,625.00 | Seller |
| Flat Fee (Seller) | $395.00 | Seller |
In this transaction, the seller paid both agent commissions at 3% each ($8,625 on a $287,500 sale). The $395 flat fee is an additional brokerage fee charged by the listing brokerage.
Following the NAR settlement changes, buyer-agent compensation is fully negotiable between the parties. Future transactions may include seller-paid compensation, buyer-paid compensation, reduced compensation, or hybrid structures. Compare this section against both your buyer-broker agreement and your purchase contract.
Government Recording and Transfer Charges
| Fee | Amount | Paid By |
|---|---|---|
| Recording Fees | $107.00 | Buyer |
| Grantor's Tax | $583.40 | Seller |
| Recordation Tax (Mortgage) | $766.67 | Buyer |
| Transfer Tax (Deed) | $972.33 | Buyer |
| Transfer Tax (Deed) | $292.00 | Seller |
These are Virginia-specific government charges. The grantor's tax is generally the seller's responsibility under Virginia law. Recording fees and recordation taxes on the mortgage are standard buyer costs. Transfer taxes on the deed are often allocated between buyer and seller in Northern Virginia, though the exact allocation is negotiable and should be confirmed in the contract.
What to check
Verify that transfer taxes, grantor taxes, and recording charges were calculated using the correct state and local rates applicable to the property's jurisdiction. These calculations vary by locality and can be difficult to verify without reference to current tax schedules. If a tax amount appears inconsistent with expectations, ask the settlement company to explain the calculation.
The HOA Costs Nobody Warns You About
| Fee | Amount |
|---|---|
| HOA March Dues | $1,034.03 |
| HOA Move-In Deposit | $75.00 |
| HOA Move-In Fee | $150.00 |
| HOA Post-Closing Fee | $70.66 |
Total HOA-related closing costs: $1,329.69.
This is where condo and townhome buyers often get surprised. The monthly HOA dues were expected. The move-in deposit, move-in fee, and post-closing fee, totaling nearly $300, are often disclosed only in HOA documents and frequently overlooked during budgeting.
These fees are established by the HOA, not the seller or title company.
What to check
Determine whether the move-in deposit is refundable and under what conditions. Some associations refund deposits after move-in if no damage occurs, while others have different policies. Review the HOA documentation and confirm details with the management company before closing. See HOA Documents Explained for what to look for.
The Bottom Line: Cash to Close
| Amount | |
|---|---|
| Due from Borrower | $50,308.71 |
| Due to Seller | $260,589.36 |
On a $287,500 purchase with a $230,000 loan, the buyer wired $50,308.71 to close. That is the actual wire amount. The $10,000 earnest money deposit is already reflected as a credit on the statement, reducing the "Due from Borrower" figure. Without that deposit credit, the buyer would have owed $60,308.71.
The buyer's total out-of-pocket on this transaction was $60,308.71: the $10,000 deposit paid when the contract was ratified plus the $50,308.71 wired to the title company before closing.
That $60,308 includes the down-payment gap between purchase price and loan amount, plus closing costs, prepaid items, escrow reserves, government charges, HOA fees, and title charges.
This is why "how much do I need to close" is never just the down payment. In Northern Virginia, total cash to close routinely runs $10,000 to $25,000 above the down payment depending on loan type, property type, and negotiated credits. For the full breakdown of these categories, see Closing Costs Explained in Virginia.
Reading the settlement statement before closing, not at the table, is how you catch errors and avoid surprises.
The Real Lesson
The settlement statement is not a formality. It is the final accounting of the largest financial transaction most people will ever make. Every line item is either correct or it isn't. Every fee is either justified or it isn't.
Review it at least 48 hours before closing. Compare it against your Loan Estimate. Ask questions about anything that changed. Verify anything that seems unusual. And if your agent isn't reviewing these numbers with you, find one who will.
Buying in Northern Virginia or Maryland and want someone who actually reviews the settlement statement before you get to the closing table? I walk my clients through every line item, explain the charges, and help identify discrepancies before settlement.
Related Articles
- Closing Costs Explained in Virginia
- HOA Documents Explained
- What Title Companies Don't Tell You
- VA Loan Guide for Military Buyers
- First-Time Home Buyer Programs in Virginia
Disclaimer: This article is general information only and is not legal, tax, accounting, title, or lending advice. Settlement statements vary by transaction, lender, title company, and locality. Always review your closing documents with your lender, settlement company, attorney, accountant, or other qualified professional as appropriate.
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