When Do You Get the Closing Disclosure?

The Closing Disclosure is a standardized, five-page document issued by a mortgage lender, designed to provide comprehensive transparency regarding the final terms of a mortgage loan and all associated costs. This form consolidates information previously presented in separate disclosures, offering a clear summary of the transaction for both homebuyers and sellers. The document outlines the loan amount, interest rate, projected monthly payments, and the various fees and charges due at closing.

Receiving the Closing Disclosure

Federal regulations, specifically the TILA-RESPA Integrated Disclosure (TRID) rule, mandate that consumers receive this document at least three business days before the loan can be finalized, a period often referred to as the “3-day rule.” For the purpose of the Closing Disclosure, a “business day” includes all calendar days except Sundays and federal public holidays. This precise definition ensures a consistent waiting period for all consumers, regardless of the lender’s operating hours.

The three-day clock begins once the lender has evidence that the borrower has received the disclosure. If the disclosure is delivered in person, receipt is considered to be on the same day. However, if sent via mail, email, or other electronic methods, the consumer is generally presumed to have received it three business days after it is sent, unless the lender can prove earlier receipt.

Key Information on the Closing Disclosure

The Closing Disclosure details the final financial aspects of your mortgage loan, spanning several pages that organize complex information into understandable sections. The first page typically presents an overview of the loan terms, including the loan amount, interest rate, and the monthly principal and interest payment. It also projects how these payments might change over time, especially for adjustable-rate mortgages, and notes if there are any prepayment penalties or balloon payments. This section allows for a quick assessment of the core financial obligations.

Moving through the document, you will find a detailed breakdown of all closing costs, categorized into loan costs and other costs. Loan costs encompass fees charged by the lender or mortgage broker, such as origination fees, appraisal fees, and credit report fees. Other costs include items like title insurance premiums, government recording charges, and prepaid expenses such as homeowners insurance and property taxes, which are often collected to establish an escrow account. The Closing Disclosure also clearly states the “Cash to Close” amount, which is the total funds a borrower needs to bring to the closing table, accounting for the down payment, closing costs, and any credits or deposits already made.

Reviewing and Responding to the Closing Disclosure

Upon receiving the Closing Disclosure, a thorough review is a necessary step before proceeding to loan consummation. It is important to compare the figures on the Closing Disclosure against the last Loan Estimate you received from your lender. This comparison helps identify any discrepancies or unexpected changes in loan terms or costs. The third page of the Closing Disclosure often includes a dedicated section for this comparison, highlighting how costs may have changed since the Loan Estimate.

Should you find any errors, inconsistencies, or unexpected charges, immediately contact your lender or settlement agent for clarification. Discrepancies could range from incorrect personal information to significant changes in interest rates or fees. If a material change occurs that affects the loan’s terms, such as an increase in the Annual Percentage Rate (APR) above a certain threshold or the addition of a prepayment penalty, the lender must issue a revised Closing Disclosure, which triggers a new three-business-day waiting period before closing.