What is a closing disclosure?

The closing disclosure is a critical document in the mortgage loan process, as it provides the borrower with a clear and detailed summary of the final terms and costs of the mortgage loan. This document is provided at least three days before the closing date, allowing borrowers the opportunity to review and understand their financial obligations and closing costs before finalizing the transaction. It includes essential information such as loan terms, projected monthly payments, and a breakdown of closing costs, ensuring transparency between the lender and the borrower.

This document's timing and content are designed to protect consumers and foster informed decision-making before closing on a property. In contrast, initial loan offers are outlined in a different document, and the closing disclosure specifically focuses on finalized details rather than providing a summary of payments during the loan period or merely agreeing to the sale price of the property.