Closing disclosure explainer | Consumer Financial Protection Bureau (2024)

Sample Closing Disclosure

Closing disclosure explainer | Consumer Financial Protection Bureau (1) Check the spelling of your name Check that loan term, purpose, product, and loan type match your most recent Loan Estimate Check that the loan amount matches your most recent Loan Estimate Check your interest rate Does your loan have a prepayment penalty? Does your loan have a balloon payment? Check that your Estimated Total Monthly Payment matches your most recent Loan Estimate Check that your Closing Costs match your most recent Loan Estimate Check that your Cash to Close matches your most recent Loan Estimate Mortgage Insurance Estimated Escrow

Closing disclosure explainer | Consumer Financial Protection Bureau (2) Check that “Services Borrower Did Not Shop For” are similar to what was shown on your Loan Estimate Check that prices in “Services Borrower Did Shop For” match what you agreed to pay Borrower-Paid Origination Charges Points Taxes and Other Government Fees Prepaids Initial Escrow Payment at Closing Other Total Closing Costs Lender Credits

Closing disclosure explainer | Consumer Financial Protection Bureau (3) Check that your Seller Credit reflects what you agreed upon with the seller Due from Borrower at Closing Adjustments for Items Paid by Seller in Advance Paid Already by or on Behalf of Borrower at Closing Adjustments for Items Unpaid by Seller Cash to Close

Closing disclosure explainer | Consumer Financial Protection Bureau (4) How much will it cost if you make a late payment? Will your lender accept partial monthly mortgage payments? Will you have an escrow account? If you do not have an escrow account, are you paying an escrow waiver fee to the lender? Assumption Demand feature Negative Amortization Security Interest

Closing disclosure explainer | Consumer Financial Protection Bureau (5) Check Contract Details Total of Payments Finance Charge Amount Financed Annual Percentage Rate (APR) Total Interest Percentage (TIP) Appraisal

Closing disclosure explainer | Consumer Financial Protection Bureau (2024)


What is the CFPB 3 day rule for closing disclosure? ›

Pre-consummation or account opening waiting period.

A creditor must furnish § 1026.32 disclosures at least three business days prior to consummation for a closed-end, high-cost mortgage and at least three business days prior to account opening for an open-end, high-cost mortgage.

Can a loan be denied after closing disclosure? ›

Despite receiving the Closing Disclosure, loan approval is not guaranteed, and unforeseen circ*mstances can lead to denial, such as changes in financial status or property issues discovered during underwriting.

Is closing disclosure accurate? ›

It's important to compare your Closing Disclosure with your initial Loan Estimate to identify any discrepancies. If you notice any differences, including an increase in the mortgage interest rate or borrowing costs, you need to talk to your lender before you sign.

What happens if I don't get my closing disclosure 3 days before closing? ›

What should I do if I do not get a Closing Disclosure three days before my mortgage closing? If you have not received this document, you should request one from your lender immediately. You should also not go through with the closing until you receive and review the Closing Disclosure.

Why do you have to wait 3 days after closing disclosure? ›

This gives you time to review the terms of the deal before you get to the closing table. Many things can change in the days leading up to closing. Most changes will not require your lender to give you three more business days to review the new terms before closing.

What is the 2 2 2 rule for mortgage? ›

One Spouse's Income Doesn't Meet Requirements

Many lenders use the 2/2/2 rule to evaluate loan eligibility, which typically requires: 2 years of W-2s. 2 years of tax returns. 2 months of bank statements.

What is the 27% rule for mortgages? ›

The traditional rule of thumb is that no more than 28% of your monthly gross income or 25% of your net income should go to your mortgage payment.

What triggers a revised closing disclosure? ›

The three items are: 1) the APR becomes inaccurate (violates tolerances); 2) the addition of prepayment penalty; and, 3) a loan product change. These three items require redisclosure and a new waiting period of three business days prior to the loan closing.

Does closing disclosure mean final approval? ›

Signing the Closing Disclosure does not automatically mean your loan is approved. It is possible for your lender to find a last-minute red flag and back out of the contract. In other words, getting denied after the Closing Disclosure is issued is possible.

Can the loan amount change after closing disclosure? ›

You can correct errors on the closing disclosure before the closing, but the loan amount and interest rate can't change unless there's a change in circ*mstances.

Does a closing disclosure mean clear to close? ›

Clear to close means you're ready for the closing process, while closing refers to the act of closing on your mortgage loan. After you've been cleared to close you'll need to sign your closing disclosure, do a final walkthrough and attend your closing.

How long after closing disclosure is clear to close? ›

There are a few more steps and actions to take before final approval, like an appraisal and inspection. How long does it take from clear to close to actual closing? It typically takes three days between the time you receive your closing disclosure and the day you close.

Is the closing disclosure the last step? ›

Your Closing Disclosure is the last thing that stands between you and finalizing your mortgage. It may feel like a mere formality to quickly sign before moving into your new home, but the information in the Closing Disclosure must be flawless.

How many days after closing disclosure can you close? ›

Thus, disclosures must be delivered three days before closing, and not 72 hours prior to closing. Note: If a federal holiday falls in the three-day period, add a day for disclosure delivery.

What is the CFPB 3 day appraisal rule? ›

Section 1002.14(a)(1) requires that the creditor “provide” copies of appraisals and other written valuations to the applicant “promptly upon completion,” or no later than three business days before consummation (for closed-end credit) or account opening (for open-end credit), whichever is earlier.

Can I waive the 3 day waiting period closing disclosure? ›

A consumer may modify or waive the right to the three-day waiting period only after receiving the disclosures required by § 1026.32 and only if the circ*mstances meet the criteria for establishing a bona fide personal financial emergency under § 1026.23(e).

What is the Reg Z 3 day rule? ›

Regulation Z provides consumers with a three business day period from consummation to rescind non-purchase credit transactions (such as refinances, second mortgages and HELOCs) secured by the member's principal dwelling.

What disclosures are specifically required within 3 days of application? ›

When you apply for a mortgage loan, the lender is required to provide you with initial disclosures within three business days of application. Initial disclosures let you know what you can expect in terms of cost, monthly payments, and loan structure.

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