Closing Disclosure
The Closing Disclosure is a five-page document your lender must send you at least three business days before closing — it shows every dollar you’ll pay, every fee, your exact interest rate, and your monthly payment. If you only read one document in the entire homebuying process, make it this one.
The Five Pages, Explained
Page 1: Loan Terms and Costs. Your loan amount, interest rate, monthly principal and interest, whether the rate can increase, and whether there’s a prepayment penalty or balloon payment. This is the headline page. If anything looks different from your Loan Estimate, stop and ask why.
Page 2: Closing Cost Details. Every fee broken into three columns — what you were originally quoted (Loan Estimate), what changed, and the final amount. Origination charges, appraisal, title fees, government recording fees, prepaid taxes and insurance — it’s all here, line by line.
Page 3: Cash to Close. The bottom line: how much money you need to bring on closing day. This includes your down payment, closing costs, any credits from the seller or lender, and adjustments for prepaid items. This number is what you wire or bring as a cashier’s check.
Page 4: Loan Disclosures. Legal details — whether the loan is assumable, whether late payments trigger a penalty, what happens in default. Not exciting, but worth scanning for surprises.
Page 5: Loan Calculations and Contact Info. Total payments over the life of the loan (prepare yourself — it’s a big number), the total interest you’ll pay, and the APR. Also lists contact information for everyone involved: lender, broker, settlement agent.
The Three-Day Rule
Federal law (TRID rules under the TILA-RESPA Integrated Disclosure framework) requires you to receive the Closing Disclosure at least three business days before closing. Sundays and federal holidays don’t count.
If the lender makes a significant change after sending the CD — like a rate increase, adding a prepayment penalty, or changing the loan product — the three-day clock resets. Minor corrections (like fixing a typo in your name) don’t trigger a new waiting period.
Use those three days. Don’t just glance at it. Sit down with a calculator and your original Loan Estimate side by side.
What to Compare
Your Closing Disclosure should closely match your Loan Estimate. Certain fees have legal tolerance limits:
- Zero tolerance (can’t increase at all): Origination fees, discount points, transfer taxes
- 10% tolerance (total of these fees can’t increase more than 10%): Third-party fees the lender selected (appraisal, title services from lender’s preferred provider)
- No limit: Third-party fees you chose (your own title company, inspector), prepaid interest, insurance escrows
If a zero-tolerance fee increased, the lender must refund the difference at closing. If the 10% bucket exceeds the limit, same deal. Push back — it’s the law.
Watch out for: A cash-to-close figure that’s significantly higher than your Loan Estimate. The most common culprits are higher-than-expected property tax prorations, additional recording fees, or “junk fees” that appeared out of nowhere. Question every new line item.
Frequently Asked Questions
What if I find an error on my Closing Disclosure?
Contact your lender immediately. Errors happen — wrong address, misspelled name, incorrect loan amount. Minor corrections can be made at the closing table. Major changes (wrong rate, wrong loan amount) require a corrected CD and may restart the three-day waiting period. Don’t sign anything until errors are fixed. Use our mortgage calculator to double-check that the monthly payment on your CD matches what you’d expect at your rate and loan amount, and review the homebuying guide for what to expect at the closing table.