Definition
A five-page form showing your final mortgage terms and closing costs, which you must receive at least three business days before closing.
What it means
The Closing Disclosure is the final version of your loan details. Federal rules require most mortgage borrowers to receive it at least three business days before they close on the loan. Compare it with your Loan Estimate: the interest rate, monthly payment, loan type and cash to close should match what you agreed to, and certain fees can only rise within set limits. If the APR increases beyond a small tolerance, the loan product changes or a prepayment penalty is added, a new three-day waiting period starts. The form also lists who pays which costs, including seller credits. Reviewing it early leaves time to ask the lender or settlement agent about any differences before signing. Keep a copy with your tax and home records.
Example
If the Loan Estimate showed $9,200 in closing costs and the Closing Disclosure shows $10,400, you can ask which line items changed and whether the increase is within the legal tolerances.
Illustrative numbers only. Your situation will differ.