What do I do if the rate or fees are different on my Closing Disclosure than they were on my Loan Estimate? | Consumer Financial Protection Bureau (2024)

FAQs

What do I do if the rate or fees are different on my Closing Disclosure than they were on my Loan Estimate? | Consumer Financial Protection Bureau? ›

If you think your lender has revised your Loan Estimate for a reason that's not valid, call your lender and ask them to explain. You can also submit a complaint to the CFPB. Review when your costs are allowed to change and by how much.

First, ask your lender for a specific reason why your rate or fees have changed. The mortgage closing costs may be different if something important changed or wasn't included in your Loan Estimate. It's also possible that your income or assets turned out to be different from what you estimated when you first applied.

Generally speaking, your total closing costs listed on your Closing Disclosure should not increase by more than 10% compared to your Home Loan Estimate. We recommend comparing the two forms side-by-side. Let your lender know about any major discrepancies to prevent issues during your closing.

Unfortunately, errors may occur on the Closing Disclosure form — that's why you need to review it. If you do find an error, your lender should provide a new Closing Disclosure form that would restart the three-day period. This could delay your closing date.

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.

TILA-RESPA Rule Protections

Under this rule, if the lender issues a revised closing disclosure with a higher cash to close within 3 business days of closing, they have violated the law. There are a few exceptions where increases are permitted: The APR decreases, or increases by no more than 1/8 of a percent.

Unless your interest rate is locked when you receive your Loan Estimate, it can change before closing. Your rate can change even if it has been locked, too.

The biggest difference between your loan estimate and Closing Disclosure is that the charges on your Closing Disclosure are finalized. But keep in mind that there are limits to the fees and charges that can and can't change between your loan estimate and your final Closing Disclosure.

Once issued, the terms of the loan estimate are good for 10 days. As long as there aren't any major changes to your application or financial situation, your lender has to honor the estimate if you begin the process of securing the loan within that time frame.

Costs that can increase by any amount

Prepaid interest, property insurance premiums, or initial escrow account deposits. Fees for services required by the lender that you have shopped separately for, if you choose a service provider that is not on the lender's written list of providers.

Who is responsible for the accuracy of the closing disclosure? ›

Lender's Role

They must ensure that the Closing Disclosure is accurate and compliant with federal regulations. Any discrepancies or errors must be corrected by the lender, and a revised Closing Disclosure must be issued to the borrower.

Loan Estimates And Closing Disclosures

The document also includes a schedule of your payments and the estimated taxes and insurance payments. Closing costs are outlined in the Loan Estimate as well. The Closing Disclosure includes all the same information, but you can't make any changes after you sign it.

Your lender is required to send you a Closing Disclosure that you must receive at least three business days before your closing. It's important that you carefully review the Closing Disclosure to make sure that the terms of your loan are what you are expecting.

It's very important these items match what you were expecting. If they don't, call your lender immediately and ask why they have changed. If it has increased, ask your lender why. A possible reason could be that closing costs have been rolled into your loan.

Clear-to-close buyers aren't usually denied after their loan is approved and they've signed the Closing Disclosure. But there are circ*mstances when a lender may decline an applicant at this stage. These rejections are usually caused by drastic changes to your financial situation.

As your lender underwrites and processes the loan over a period of several weeks, rates can move up or down. If you lock the rate and market interest rates increase, you still get to keep your lower rate.

When you assume a mortgage, the current borrower signs the balance of their loan over to you, and you become responsible for the remaining payments. That means the mortgage will have the same terms the previous homeowner had, including the same interest rate and monthly payments.

You want accurate figures. At Homebuyer and plenty of other lenders, these costs get estimated as close to 100 percent accurate as possible. Remember that numbers are never exact upfront. Don't worry about any estimated fees that your lender doesn't dictate.