SOME CARD INFO MAY BE OUTDATED
This page includes information about these cards, currently unavailable on NerdWallet. The information has been collected by NerdWallet and has not been provided or reviewed by the card issuer.
A few days before you're scheduled to close on a mortgage, the lender will provide a Closing Disclosure. Review this document carefully and ask questions if there's anything that you don't understand.
What is a Closing Disclosure?
The Closing Disclosure is a five-page form that spells out the final terms and closing costs of a home loan.
Your lender must provide the Closing Disclosure at least three business days before the scheduled loan closing. This gives you time to review everything and ask questions before signing forms at the closing table.
Reviewing the Closing Disclosure
Go through the Closing Disclosure line by line. Compare the information on the Closing Disclosure with that on the Loan Estimate — the document the lender provided shortly after you applied for the mortgage.
Did you know...
The Loan Estimate is a document that gives estimated costs of a home loan. You should receive a Loan Estimate from the lender within three business days of applying for a mortgage. If any information looks different from what you expected, contact the lender or settlement agent right away.
Page 1
The first page of the Closing Disclosure provides an overall summary of your mortgage including the loan amount, interest rate, estimated monthly payment, closing costs and the amount of cash needed at closing. It’s designed to give you a general overview of the key financial terms before you sign. You can use it to confirm that the numbers match what you were quoted earlier in the process.
This page also includes your personal information, so be sure to verify that your name is spelled correctly and your address is accurate. If there is an error, it's important to let your lender know so it can be corrected.
Page 2
The second page spells out the closing costs in detail. It breaks down where your money is going, including origination charges, which are the loan fees your lender charges for creating and processing your mortgage. It also lists third-party fees such as the cost of the appraisal, title services and inspections.
The “Other Costs” section includes additional expenses such as homeowners insurance and interest, initial escrow deposits for taxes and insurance, and government fees like recording or transfer taxes.
» MORE: Calculate your closing costs
Page 3
Pay special attention to the third page, which shows the final breakdown of your numbers, including how your cash-to-close is calculated and a summary of the transaction. You’ll see a comparison table showing the costs as reported by the Loan Estimate and the actual charges to be applied at closing. This section clearly shows whether the costs have changed since receiving your Loan Estimate.
At the bottom is the literal bottom line — the total amount you, as the borrower, will owe at closing. The image below is from a sample Closing Disclosure on the Consumer Financial Protection Bureau's website, where you can click through each page of the form for more detail.
Page 4
Page four outlines important loan terms and legal disclosures. It lays out the conditions of your mortgage, including escrow account details, potential late fees or penalties, and whether certain features apply, such as loan assumption or early repayment rules.
The fourth page also explains other terms that affect how your loan works over time and what you’re responsible for as the borrower.
Page 5
The fifth page provides a boiled down summary of the loan calculation along with contract details, and appraisal, refinancing and tax deduction disclosures.
This page is a great resource for who to contact about your loan, how and where to make payments, and includes additional details about your rights and responsibilities after closing.
What can cause a 3-day closing delay?
Any substantial revision to the loan’s terms triggers a new three-day review. Minor changes such as modifications to the escrow or adjustments to prorated payments for taxes, utilities and the like don’t qualify.
These three things can reset the 72-hour clock:
- The APR increases by more than one-eighth of a percentage point for fixed-rate loans or more than one-quarter of a percentage point for adjustable-rate mortgages.
- A prepayment penalty is added to the loan terms.
- The loan product changes, such as moving from a fixed-rate to an adjustable-rate loan or to an interest-only mortgage.
Report errors or ask questions ASAP
The Closing Disclosure may look official — and maybe a little intimidating at first. But don't assume the document is correct, advises the Consumer Financial Protection Bureau. Mistakes can happen, which is why it's critical that you review closing documents carefully and contact your lender or settlement agent if anything seems awry.
Explore more on
