When Must a Consumer Receive the Closing Disclosure?

The Closing Disclosure (CD) is a key document in a real estate transaction, serving as a final summary of your mortgage loan terms and all associated closing costs. It provides clarity and transparency, ensuring you have a complete understanding of the financial aspects before becoming legally obligated to the loan. This document replaces older forms, helping you compare final terms against initial estimates. Thorough review is important to confirm details align with your expectations and agreements.

The Initial Disclosure Timing

Federal regulations require consumers receive the Closing Disclosure at least three business days before their mortgage loan’s scheduled closing date. This rule falls under the TILA-RESPA Integrated Disclosure (TRID) rule, often called the “Know Before You Owe” rule, implemented by the Consumer Financial Protection Bureau (CFPB). The primary goal of this three-day waiting period is to provide ample time for consumers to review the detailed financial information and compare it to the Loan Estimate received earlier in the process. This period prevents last-minute surprises and ensures an informed decision before signing the final loan documents. Closing cannot proceed until this mandatory waiting period has elapsed.

Understanding Receipt and Business Days

The precise timing of the Closing Disclosure depends on when it is considered “received” and the specific definition of a “business day” under the TRID rule. For the Closing Disclosure, a “business day” includes all calendar days except Sundays and federal public holidays. This definition is distinct from how “business day” might be interpreted for other financial transactions. For example, if a document is provided on a Monday, the three-business-day period typically counts Tuesday, Wednesday, and Thursday, allowing closing to occur on Friday, assuming no federal holidays fall within that timeframe.

The method of delivery directly affects the determination of receipt. If the Closing Disclosure is delivered in person, it is considered received on the same day. For electronic delivery, receipt is tied to the consumer’s acknowledgment of the disclosure. When the Closing Disclosure is sent via mail, it is presumed to be received three business days after it is placed in the mail, adding extra time to the overall waiting period. A mailed disclosure might effectively require six days before closing: three days for presumed delivery plus the three-day review period.

Events Triggering a New Disclosure

Certain significant changes to loan terms or costs after the initial Closing Disclosure will trigger a new three-business-day waiting period, necessitating a revised disclosure. One such trigger is when the Annual Percentage Rate (APR) changes beyond a specific tolerance, typically an increase of more than one-eighth of a percent (0.125%) for most fixed-rate loans. A decrease in APR does not typically trigger a new waiting period.

Another event requiring a new waiting period is a change in the loan product itself. For instance, switching from a fixed-rate mortgage to an adjustable-rate mortgage fundamentally alters the loan’s financial structure and future payment obligations. The addition of a prepayment penalty not previously disclosed also mandates a new three-business-day waiting period. Prepayment penalties can result in a fee if you pay off your loan early, significantly impacting your financial flexibility.

Addressing Disclosure Delays or Errors

If you do not receive your Closing Disclosure within the expected timeframe, or if you discover errors, take immediate action. Contact your lender or loan officer without delay to inquire about the disclosure’s status. Review the document for accuracy, comparing it against the last Loan Estimate. This helps identify discrepancies in loan terms, interest rates, fees, or other costs.

Any questions or identified errors, even minor ones like misspelled names or incorrect addresses, should be communicated to your lender promptly. While some minor errors may not require a new waiting period, significant changes or inaccuracies could delay your closing until a corrected disclosure is provided and the three-business-day period restarts. Remember that closing cannot occur until the required waiting period has fully passed. If issues persist or you feel your rights are being violated, consider consulting a real estate attorney or a housing counselor for guidance.