When Do You Get a Closing Disclosure?

The Closing Disclosure (CD) is an important document received near the conclusion of the homebuying process, detailing the final terms and costs of your mortgage loan. It provides a comprehensive overview, ensuring transparency and allowing you to review financial specifics before finalizing your home purchase. This five-page form summarizes the loan’s key aspects. It replaced previous documents, consolidating information for clearer understanding. Understanding this document is important as signing it means committing to its stated conditions.

The Mandatory Delivery Timeline

Federal regulations mandate a specific timeframe for receiving your Closing Disclosure, ensuring you have adequate time for review. Lenders are required to provide this document at least three business days before your scheduled loan closing date. This waiting period is a protective measure, allowing you to compare the final terms and costs against the initial Loan Estimate you previously received.

For the Closing Disclosure, a “business day” is defined as all calendar days except Sundays and federal public holidays. If the Closing Disclosure is mailed, emailed, or sent via courier, the three-day waiting period begins after presumed receipt, which is typically three business days after it is sent.

Key Details in the Closing Disclosure

The Closing Disclosure provides a detailed breakdown of your mortgage loan’s final terms and associated costs. It clearly states the loan amount, the interest rate, and your projected monthly principal and interest payments. This section also indicates whether the loan includes features like a prepayment penalty, which is a charge for paying off your mortgage early, or a balloon payment, a large one-time payment due at the end of the loan term.

Beyond loan terms, the document itemizes all closing costs, which are fees associated with finalizing the mortgage transaction. These costs include lender charges, such as origination fees and discount points, and fees for third-party services like appraisals, title insurance, and recording fees. The Closing Disclosure also presents the “Cash to Close” amount, which is the total funds you need to bring to the closing table. This figure encompasses your down payment, remaining closing costs, and any prepaid expenses like homeowners insurance or property taxes, adjusted for any earnest money deposits or seller credits.

Your Review and Questions

Upon receiving the Closing Disclosure, carefully review its contents to ensure accuracy and consistency with your expectations. A primary action involves comparing the Closing Disclosure line-by-line with the initial Loan Estimate you received earlier in the process. While some costs, such as those for third-party services you could shop for, may vary slightly, certain fees like lender charges should remain consistent.

Verify that your personal information, property address, and all loan terms, including the loan amount, interest rate, and loan type, are correct. Pay close attention to the itemized closing costs and the final cash to close amount, ensuring no unexpected increases or charges appear. If you identify any discrepancies or have questions, immediately contact your lender or settlement agent for clarification before the scheduled closing date. This review period is your opportunity to address any issues.

Impact of Changes and Re-disclosure

Certain material changes to your loan terms after the initial Closing Disclosure is issued will legally require a new disclosure and a reset of the three-business-day waiting period. This ensures you have adequate time to review significant alterations before closing. One such change is an increase in the Annual Percentage Rate (APR) above a specified tolerance, generally more than one-eighth of a percentage point for most loans.

Another trigger for re-disclosure is a change in the loan product, such as switching from a fixed-rate to an adjustable-rate mortgage. If a prepayment penalty is added after the initial disclosure, a new Closing Disclosure must be issued, and the waiting period restarts. For most other changes, such as minor adjustments to escrow amounts or clerical errors, a revised Closing Disclosure can be provided at or before closing without delaying the transaction.