A Closing Disclosure (CD) is a standardized five‑page form that summarizes the final terms of a mortgage and the full breakdown of closing costs, the purchase price, and the exact "cash to close." Lenders must give it to buyers at least three business days before closing under the federal TILA‑RESPA Integrated Disclosure (TRID) rule. Think of the CD as the final financial snapshot — it shows what you will borrow, how you will pay, and how much money must change hands at closing.
Buyers use the CD to confirm interest rate, monthly payment, and that closing costs match expectations from the Loan Estimate. Sellers receive a short seller version showing sale proceeds and the credits/charges that affect their net. Lenders and settlement agents use it to reconcile funds and comply with federal disclosure rules. The CD gives everyone a transparent, legal record of the final deal and an opportunity to catch errors before signing.
The lender is legally responsible for preparing and delivering the Closing Disclosure, but in practice the lender, title/settlement agent, or escrow company often prepares the numbers. The lender (or its agent) must provide the CD to the borrower and a seller version to the seller, following TRID timing rules.
Federal rules require the borrower receive the Closing Disclosure at least three business days before the scheduled closing or consummation of the loan. These three business days give buyers time to review the final terms and ask questions or request corrections. "Business days" generally exclude Sundays and federally observed holidays; count starts the day after the CD is delivered.
Not every minor tweak restarts the three‑day clock. Material changes that trigger a new waiting period include an increase in the APR beyond the allowed tolerance, a change to the loan product (for example, switching from fixed to adjustable), or the addition of a prepayment penalty. If a new Closing Disclosure is required, the borrower must again have three business days to review before closing.
Closing Disclosures can be delivered electronically if you consent and the lender provides a way to access and retain the form. Electronic delivery doesn’t remove the three‑day waiting rule — the countdown begins when the CD is considered "received" under the lender’s delivery method. Always confirm you received it, can open the file, and can download or print a copy for your records.
The Loan Estimate (LE) is an early‑stage estimate of loan terms and likely closing costs, provided within three business days after application. The Closing Disclosure is the final, exact statement provided at least three business days before closing. The HUD‑1 Settlement Statement is the older form used pre‑TRID for most closed‑end consumer mortgages; it was largely replaced by the CD for most transactions in 2015. The CD is more buyer‑friendly and standardized than the HUD‑1 and includes a comparison to the Loan Estimate.
Estimates can change as appraisals, title searches, underwriting, required insurance, and third‑party fees are finalized. Some fees are subject to tolerance limits and may rise slightly; others can’t increase without a new disclosure. Expect differences, but large or unexplained increases should be questioned.
The HUD‑1 is still used for certain reverse mortgages and some transactions not covered by TRID, but for most purchase and refinance mortgages the Closing Disclosure replaced it. Confusion persists because HUD‑1, LE and CD all have similar purposes — showing costs and who pays — but the CD is the current legal standard for most residential mortgages.
This section lists the loan amount, interest rate, monthly principal & interest payment, whether the loan has adjustable rates, and the loan term (years). Verify the interest rate and monthly payment match what you expect and that the loan amount corresponds to the purchase contract less your down payment.
Shows how your monthly payments may change over time (if an ARM or stepped payment), and includes components such as principal & interest, estimated escrow (taxes and insurance), and any balloon payments. Confirm the total monthly payment and the escrow line if an escrow account will be required.
Displays the total cash the buyer must bring to closing: down payment, closing costs, seller credits, earnest money, and adjustments/prorations. This is the single most important total for buyers — use it to verify your funds are sufficient and to reconcile your wire or cashier’s check.
Breaks closing costs into categories: loan costs (origination, points, underwriting), other costs (taxes, recording, title/closing fees), and totals. Each line shows who pays (borrower or seller). Review each fee, especially originator and title charges, and flag anything that looks duplicated or unusually high.
Lists important legal features such as whether there’s a prepayment penalty or balloon payment, whether the loan is assumed, and tax‑related disclosures. A prepayment penalty or unexpected balloon payment is a red flag if you weren’t told about it earlier.
Includes details about whether the loan requires an escrow account, annual escrow analysis estimates, the contact information for the lender and settlement agent, and a summary of seller credits or adjustments. Use the contact details to request corrections if needed.
Cash to close = purchase price minus loan amount plus closing costs, minus buyer credits and deposits. Lender credits reduce what you pay at closing but may be exchanged for a slightly higher rate; earnest money already paid is subtracted from the required buyer funds at closing. Seller credits reduce the buyer’s cash at closing and show up on the seller’s settlement page as charges.
Prepaids are up‑front costs for items like homeowner’s insurance premium, prepaid interest, and initial escrow deposits. Prorations adjust property taxes, HOA dues, and utilities between buyer and seller for the portion of the billing period each party owns the property. These items are included in the cash to close because they are actual funds that must be settled at closing.
Verify cash to close by comparing the CD to your Loan Estimate and any account statements showing earnest money. Confirm accepted seller credits from the purchase contract are included. Contact the lender or settlement agent for a confirmation in writing and obtain final wiring instructions only by phone using a verified number.
Origination charge: fees the lender charges for processing the loan. Points: prepaid interest amounts paid to lower the interest rate (one point = 1% of loan amount). Interest rate: the nominal annual rate on your loan. APR (Annual Percentage Rate): a broader measure of loan cost that includes certain fees and charges; APR will usually be higher than the interest rate.
Escrow account: lender‑held account to pay taxes and insurance on your behalf. Prepaid interest: interest accrued between closing and your first payment. Title fees: costs for title search and insurance protecting against ownership claims. Recording fees: government charges to record the deed and mortgage.
Seller credits: negotiated amounts the seller pays toward the buyer’s closing costs. Lender credits: funds the lender applies to closing costs, often in exchange for a higher rate. Broker commissions: fees paid to real estate agents, usually shown on the seller’s statement as part of seller closing costs.
TRID allows certain limited variances from the Loan Estimate for some fee categories (commonly called tolerances). However, material changes — including an APR increase beyond permissible limits, change in loan product, or addition of a prepayment penalty — require a new Closing Disclosure and a fresh three‑business‑day review period. Smaller adjustments within tolerance limits typically don’t restart the clock.
Examples that require a new CD: (1) the APR is higher than the tolerance allows, (2) you switch from a fixed‑rate to an adjustable‑rate loan, (3) the lender adds a prepayment penalty not previously disclosed. Examples of tolerated changes: small increases in third‑party fees within allowed thresholds.
If a corrected CD is issued late and the three‑day waiting period can’t be satisfied before the scheduled closing, the closing must be delayed until after the borrower has had three business days to review the new CD. Closing despite a required waiting period can result in regulatory violations and loan rescission risk in certain situations.
Line‑by‑line comparison is the best defense. Verify loan terms (interest rate, loan amount), closing cost categories, seller credits, and the cash to close against the Loan Estimate and the purchase contract. Highlight any differences and ask for written explanations for each one.
Use only verified phone numbers to confirm wiring instructions; never rely solely on email. Confirm the title company’s wiring details by calling a number you’ve independently verified (from your purchase contract or the title company’s official website). Consider using a cashier’s check or an insured wire service recommended by a trusted party. Watch for last‑minute changes to beneficiary or bank details — these are common wire‑fraud signals.
Contact your loan officer and the settlement/title officer immediately if you find an error. Copy your real estate agent so they can coordinate with the seller’s agent. Request corrections in writing and ask for an updated Closing Disclosure showing the fix.
Document discrepancies with screenshots or printed copies and time‑stamped emails. If the lender or settlement agent doesn’t resolve the issue promptly, escalate to the lender’s compliance department and keep records. If necessary, file a complaint with the Consumer Financial Protection Bureau (CFPB) or your state regulator.
Seek an attorney if the error is large, if funds are at risk, if the lender refuses reasonable corrections, or if you suspect fraud. An attorney can advise on contract remedies and potential claims for damages or delay.
Negotiable fees often include lender origination, points, and some title or settlement fees (if you shop providers). Fixed fees typically include government recording charges and certain third‑party fees you can’t control. Realtor commissions are usually set in the listing agreement and less negotiable at closing.
Ask your lender for credits toward closing costs or to re‑shop title and homeowners insurance providers early in the process. Any change that affects the Closing Disclosure should be requested and confirmed in writing early enough to avoid delays.
Negotiation is easiest before the Closing Disclosure is finalized. Once the CD is issued three days before closing, meaningful renegotiation is difficult without reissuing the CD and restarting the waiting period.
For refinances the CD functions the same way but focuses on payoff amounts, new loan terms, and any cash‑out amounts. TRID rules and the three‑day review still apply. Refinances may also include additional state or lender payoff fees that affect cash to close.
Sellers receive a two‑page seller CD showing sale price, real estate commissions, payoff of existing loans, seller credits, and net proceeds. Sellers should verify commission amounts, agreed seller credits, and payoff figures for outstanding liens.
The Closing Disclosure typically includes a receipt line indicating you received the document. Signing that line confirms receipt, not acceptance of the loan terms. You become legally bound by loan commitments when you sign the loan documents at closing, not by signing the CD receipt alone.
Borrowers usually sign a separate acknowledgment of receipt on the CD (page 5). The seller signs the seller CD receipt when provided. The actual loan documents and settlement statement are signed at closing; those are the documents that finalize the transaction.
Consult an attorney if you find major errors, if the CD shows unexpected loan features (prepayment penalty, balloon), if seller proceeds or payoffs look incorrect, or if you suspect fraud. An attorney can review how CD items relate to the purchase contract and closing documents.
Maria received a Loan Estimate showing a $300,000 loan at 3.75% and $6,000 estimated closing costs. Three days before closing she got the Closing Disclosure showing the same loan amount and rate but $6,900 in closing costs because final title fees and prepaid insurance added $900. Maria compared the CD to her LE, confirmed the added fees matched itemized invoices from title and insurance, and verified the cash to close after subtracting her $5,000 earnest money. She also confirmed wiring instructions with the title company by calling a phone number from the purchase contract. Because she checked the CD promptly she avoided an unexpected shortage at closing and prevented a costly last‑minute wire error.
Save a PDF of the Closing Disclosure, the Loan Estimate, purchase contract, any emails about fee changes, and screenshots of final wiring instructions. Keep copies for at least several years for tax and warranty purposes.
A final five‑page form that shows the exact loan terms, closing costs, and the cash you must bring to close — provided at least three business days before closing.
Your lender must give it to you at least three business days before the closing date.
Purchase price minus loan amount plus closing costs, prepaids, prorations and minus any buyer credits or deposits (like earnest money).
The lender prepares and is responsible for delivering the Closing Disclosure; title/settlement agents often prepare the calculations.
Notify your loan officer and settlement agent immediately. If the error is material and requires a new CD, closing will be delayed until the three‑day review period is met.
Yes. The seller gets a two‑page seller version that shows the sale price, charges, credits, and the net proceeds to the seller.
For technical loan questions contact your loan officer. For settlement and wiring questions contact the title/escrow officer. Loop in your real estate agent for contract issues. Consult an attorney for unresolved disputes, suspected fraud, or complex legal questions.
For complaints or guidance use the Consumer Financial Protection Bureau (CFPB). For legal referral or issues contact your state bar association. HUD provides housing resources for special programs. (Search those agencies directly for official contact details.)
Subject: Closing Disclosure — request for clarification/correction Hello [Loan Officer/Title Officer Name], I received the Closing Disclosure dated [date] for the property at [address]. I have reviewed the document and need clarification/correction on the following items: 1) Line [x]: [describe discrepancy — e.g., “Title search fee shows $X more than estimated; please provide invoice.”] 2) Line [y]: [e.g., “Cash to close appears to be $X higher than my Loan Estimate after accounting for earnest money; please reconcile.”] 3) [Any other issues] Please provide written clarification or an updated Closing Disclosure as soon as possible. I need confirmation that any corrected CD will allow the required three business‑day review before closing. Thank you, [Your name] | [Phone] | [Email]
Print the Closing Disclosure, Loan Estimate, purchase contract, proof of earnest money, final wiring instructions (verified), and photo ID. Bring a calculator and notes of any questions you want answered before signing.
