What is the Closing Disclosure for a Mortgage?

What is a Closing Disclosure?

The Closing Disclosure is a document provided to the borrower at least three business days prior to a mortgage loan closing. It provides a detailed summary of the loan terms, including the interest rate, monthly payments, and total costs of the loan over its term, as well as an itemized list of all fees and charges associated with the loan. The Closing Disclosure replaces the Truth in Lending Disclosure (TIL) and the HUD-1 Settlement Statement under the Consumer Financial Protection Bureau's (CFPB) integrated mortgage disclosure rule, which became effective in October 2015. The purpose of the Closing Disclosure is to help borrowers understand the terms of their mortgage loan and to ensure that they are aware of all the costs involved before they agree to the loan.

Can My Closing Disclosure Change Before I Close?

Yes, a Closing Disclosure can change before the closing of the mortgage loan. The Closing Disclosure is meant to provide a clear and accurate summary of the terms of the loan, as well as an itemized list of all fees and charges, so that the borrower has a full understanding of the costs associated with the loan. However, if there are any changes to the loan terms or fees before closing, the lender must provide a revised Closing Disclosure to the borrower. This gives the borrower an opportunity to review and understand the updated terms and costs of the loan before the closing takes place.

It is important for borrowers to carefully review the Closing Disclosure and ask for clarification on any changes that occur before the closing to ensure they have a full understanding of the terms of their loan.

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