Required by federal law, the Closing Disclosure (CD) is typically the first document you will review with your closing agent. This form will disclose all costs related to the home purchase, including loan fees, real estate taxes, and other miscellaneous expenses. There are many separate costs when buying a home, and this document helps you understand and prepare for them. It contains information regarding the details of your loan, including the amount financed, the annual interest percentage rate, the finance charge, and the payment schedule. This document will also take into consideration any modifications that may have been made to your interest rate or points during the loan process.
Be sure to compare your Closing Disclosure (CD) to your initial Loan Estimate (LE) as the CD will include final closing costs and any modifications that may have been made to your interest rate or points during the loan process. Some changes from your initial LE are normal, but make sure to ask for an explanation if you notice a big shift. Because this document contains a lot of information that is essential for homeowners to review, it is required by law that it be sent to you three business days before closing.