Your Closing Disclosure
Explained

What Is the Closing Disclosure?

The Closing Disclosure (CD) is a five-page form that itemizes every financial detail of your mortgage and real estate transaction. It replaces the older HUD-1 Settlement Statement for most residential transactions and is required by the Consumer Financial Protection Bureau (CFPB) under the TILA-RESPA Integrated Disclosure (TRID) rules.

By law, you must receive your Closing Disclosure at least three business days before closing. This gives you time to review the numbers, compare them to your original Loan Estimate, and ask questions before you sign.

Key Sections of the Closing Disclosure

Page 1: Loan Terms and Projected Payments

The first page summarizes your loan amount, interest rate, monthly principal and interest payment, and whether your rate or payments can increase over time. It also shows your projected total monthly payment including taxes, insurance, and any mortgage insurance (PMI). Compare these numbers to your Loan Estimate to make sure nothing changed unexpectedly.

Page 2: Loan Costs and Other Costs

This is where most buyers focus their attention. Section A lists origination charges (lender fees, points, application fees). Section B lists services the lender required you to use (appraisal, credit report). Section C lists services you were able to shop for -- including title insurance and title-related fees.

Section D through J cover taxes, government recording fees, prepaids (homeowner's insurance, prepaid interest, property taxes), and initial escrow deposits.

Page 3: Cash to Close and Summaries

Page 3 shows your total cash to close -- the amount you need to wire or bring as a certified check on closing day. It also provides separate summaries for the buyer's and seller's sides of the transaction, listing credits, adjustments, and prorations (like prepaid property taxes).

Pages 4-5: Additional Information

These pages contain details about your loan including the lender's contact information, loan features (escrow account, assumption policies), and calculations of total interest and costs over the life of the loan.

How to Review Your Closing Disclosure

1. Compare to your Loan Estimate. Go line by line and flag any numbers that changed. Your lender should provide a "Changed Circumstance" explanation for any significant differences.
2. Verify your personal information. Name, address, property address, loan amount, and interest rate should all match your expectations.
3. Check title fees. Verify the title insurance premium matches the quote you received from your title company.
4. Review prorations. Property taxes and HOA dues are typically prorated between buyer and seller based on the closing date.
5. Confirm cash to close. This number should align with what your lender told you to wire. If it does not match, contact your attorney or title company immediately.
6. Ask questions. Do not sign anything you do not understand. Your attorney, title closer, and lender are all available to explain.

Common Errors to Watch For

• Double-counted fees: A service listed under both lender charges and title charges.
• Incorrect tax prorations: Taxes should be prorated to the exact closing date.
• Missing credits: Seller concessions, lender credits, or earnest money not reflected.
• Wrong loan terms: Interest rate, loan amount, or term not matching your commitment letter.

What Happens If Something Is Wrong?

If you find an error on your Closing Disclosure, notify your lender and attorney immediately. Minor corrections can often be made quickly. However, certain changes to loan terms or increases in fees may trigger a new three-business-day waiting period before closing. This is another reason why reviewing your CD promptly is critical.

At Simplicity Title, we prepare our portion of the settlement statement with precision and are happy to walk through every line item with you or your attorney before closing day. Reach out with any questions.