Can Cash to Close Change After Closing Disclosure?

The homebuying process involves various financial disclosures, with the Closing Disclosure summarizing a real estate transaction. This document details the final loan terms and all mortgage costs. Understanding the “cash to close” amount, the total funds a buyer must bring to closing, is important. This figure represents numerous expenses and credits, and its accuracy is essential for a smooth transaction.

Understanding the Closing Disclosure and Cash to Close

The Closing Disclosure (CD) is a five-page form that provides final details about the mortgage loan. Lenders are required to provide this document to the borrower at least three business days before the scheduled closing date. This allows borrowers time to review all financial aspects and closing costs before signing, helping prevent unexpected charges.

“Cash to close” represents the total money a homebuyer needs to pay at closing. This sum includes the down payment and various closing costs, such as loan origination fees, appraisal fees, title insurance premiums, and recording fees. Prepaid expenses like property taxes and homeowner’s insurance premiums are also included, along with adjustments for seller credits or earnest money deposits.

Changes Requiring a New Closing Disclosure

Significant changes to a mortgage loan necessitate a new Closing Disclosure, triggering a mandatory three-business-day waiting period before closing. This rule, under the TILA-RESPA Integrated Disclosure (TRID) framework, ensures consumers have time to review substantial alterations. One such change involves the annual percentage rate (APR) becoming inaccurate. If the APR increases by more than 0.125% for most fixed-rate loans or 0.25% for adjustable-rate loans, a new CD and waiting period are required.

A new Closing Disclosure is also required if a prepayment penalty is added to the loan terms. This means the borrower would incur a fee for paying off their mortgage early. Similarly, if the loan product changes, such as from a fixed-rate to an adjustable-rate mortgage, a new CD must be provided. These modifications warrant renewed review by the borrower.

Protecting Your Cash to Close

Once the final Closing Disclosure is provided, most figures related to the cash to close should be final. This expectation prevents last-minute surprises. Minor, non-APR related changes can occur without requiring a new three-day waiting period. These exceptions involve small adjustments to recording fees or pro-rated property tax amounts finalized just before closing.

Homebuyers should compare their initial Loan Estimate with the final Closing Disclosure. This helps identify discrepancies or unexpected fee increases. If a borrower spots an inconsistency or unexplainable change, contact their lender or real estate agent for clarification. Understanding these documents helps ensure the cash to close amount remains as expected.

Post-Closing Adjustments and Corrections

In rare instances, the “cash to close” figures may be adjusted even after the closing has occurred. These post-closing adjustments typically arise from calculation errors or the need to reconcile certain accounts. For example, an error in prorating property taxes or a miscalculation of escrow account deposits could lead to a small adjustment. Such scenarios are generally uncommon and involve specific, verifiable discrepancies rather than broad changes.

The process for handling post-closing adjustments usually involves communication from the lender or title company. They will notify the borrower of the discrepancy and explain the reason for the adjustment. Resolution methods can include a refund to the borrower if an overpayment was made or an additional payment requested from the borrower to cover a shortfall. These adjustments are typically small in magnitude and are handled through a direct reconciliation process to ensure all accounts are accurate.