Closing Disclosure

Closing Disclosure

The Closing Disclosure is a crucial document in the home buying process, particularly in the context of residential mortgage transactions. It outlines the final terms and costs associated with the loan, ensuring transparency between the borrower and the lender.

The Closing Disclosure must be provided to the borrower at least three business days before the closing date of the mortgage. This requirement allows the borrower to review the document thoroughly and ask questions or address any discrepancies before finalizing the transaction. It includes key information such as the loan amount, interest rate, monthly payments, closing costs, and other fees associated with the mortgage.

For example, the Closing Disclosure breaks down costs into categories like loan costs (origination fees, points, etc.), other costs (appraisal fees, title insurance, etc.), and total closing costs. Additionally, it offers a comparison section that shows the borrower the initial Loan Estimate provided earlier in the process, enabling them to see how the final terms may have changed.

Overall, the Closing Disclosure serves as a vital tool for consumers in the home buying process, promoting informed decision-making and helping avoid unexpected financial surprises at closing.