Key takeaways
- You must receive your Closing Disclosure at least three business days before closing.
- It has five pages that mirror your Loan Estimate, so you can compare them side by side.
- Some fees can't increase at all; others can increase by up to 10% in total; some can change freely.
- Section J and "Cash to Close" show exactly what you need to bring.
The Closing Disclosure (CD) is a five-page form that lays out the final terms and costs of your mortgage. It's required by the CFPB's TILA-RESPA Integrated Disclosure (TRID) rule. The three-day review period exists so you can catch mistakes and ask questions before you sign. Here's what's on each page.
Page 1: loan terms, projected payments and costs at closing
- Loan terms: loan amount, interest rate, monthly principal and interest, and whether any of these can increase. Also shows whether there's a prepayment penalty or balloon payment.
- Projected payments: your total estimated monthly payment, including mortgage insurance and escrow for taxes and insurance.
- Costs at closing: total closing costs and the cash you need to close.
Page 2: closing cost details
| Section | What's in it |
|---|---|
| A. Origination charges | Lender fees and any discount points |
| B. Services you did not shop for | Appraisal, credit report, flood certification and services the lender chose |
| C. Services you did shop for | Title and settlement services you selected from outside the lender's list |
| D. Total loan costs | A + B + C |
| E. Taxes and government fees | Recording fees and transfer taxes |
| F. Prepaids | Homeowners insurance premium, prepaid interest, and property taxes due |
| G. Initial escrow payment | Cushion deposited into your escrow account |
| H. Other | HOA fees, home warranty, owner's title insurance, commissions |
| I. Total other costs | E + F + G + H |
| J. Total closing costs | D + I, minus lender credits |
Page 3: calculating cash to close and summaries
This page compares Loan Estimate figures with final figures for items like closing costs, down payment, deposit and seller credits, and flags anything that changed. Below that, the summaries of transactions show the borrower's and seller's sides, including earnest money, prorated property taxes and adjustments.
Page 4: loan disclosures
Explains whether your loan is assumable, whether there's a demand feature, late payment terms, negative amortization, partial payment policies and the escrow account details. Read the late fee section so you know your grace period.
Page 5: loan calculations and contact information
- Total of payments: everything you'll pay over the life of the loan if you keep it to term.
- Finance charge: the dollar cost of credit.
- Amount financed and APR.
- Total interest percentage (TIP): total interest as a percentage of the loan amount.
- Contact details for the lender, brokers, agents and settlement agent.
Which fees can change? The tolerance rules
| Tolerance | Fees included |
|---|---|
| Zero tolerance (can't increase) | Lender fees, points, transfer taxes, and services from providers the lender required |
| 10% cumulative tolerance | Recording fees and third-party services you chose from the lender's list |
| No limit | Prepaid interest, insurance premiums, escrow deposits, and services from providers you found yourself |
If a fee rises beyond tolerance without a valid change of circumstance, the lender must refund the difference.
Changes that trigger a new three-day review
- The APR increases beyond a set threshold (generally more than 1/8 percentage point for fixed-rate loans)
- The loan product changes, such as fixed to adjustable
- A prepayment penalty is added
Other changes can be corrected without restarting the waiting period.
Your Closing Disclosure checklist
- Names spelled correctly and the property address is right.
- Loan amount, rate, term and loan type match what you agreed to.
- Rate lock reflected; points match your choice.
- Seller credits and earnest money appear correctly on page 3.
- Escrow amounts look reasonable for your area's taxes and insurance.
- Cash to close matches what the title company told you to wire.
Questions to ask your loan officer during the review
- Why did any fee in Section A, B or E change from my Loan Estimate?
- Is my rate lock reflected, and when does it expire?
- How many days of prepaid interest are included, and will that change if closing moves?
- What is my first payment date and amount?
- Are the escrow figures based on current tax and insurance bills?
Write down the answers and keep them with your closing documents. If anything still seems wrong, ask for a corrected Closing Disclosure before you sign.
Frequently asked questions
What if I find an error?
Contact your loan officer and settlement agent immediately. Many errors can be fixed with a corrected CD.
Can I close sooner than three business days?
Only in a bona fide personal financial emergency, with a written waiver. It's rare.
How much are closing costs typically?
Commonly 2% to 5% of the loan amount, varying by state, loan type and whether the seller contributes. See seller concessions to reduce what you pay.
