How to Read and Use Your Closing Disclosure
The Closing Disclosure is the final financial summary of your loan transaction — a five-page document issued by your lender at least three business days before signing. It replaces the Loan Estimate you received earlier in the process with final, binding numbers. The three-day review period is a federal consumer protection requirement, and it exists precisely to give you time to read this document carefully and raise any concerns before you're at the signing table.
Before 2015, buyers in many states received their final loan numbers for the first time at the closing table — sometimes with only minutes to review documents involving hundreds of thousands of dollars. The Closing Disclosure changed that. Use the review period it provides you.
What to Review Line by Line
- 1Loan terms — Confirm loan amount, interest rate, and monthly payment match what you agreed to. If your rate was locked, verify it has been honored exactly.
- 2Closing costs — Compare these to your original Loan Estimate line by line. Some fees are permitted to change; others are subject to strict tolerance limits. Ask your lender to explain any difference greater than a few dollars.
- 3Cash to close — The precise amount you need to bring to closing, confirmed here for the first time. Initiate your wire transfer or obtain your cashier's check the business day before signing to ensure funds are available on time.
- 4Prepaid items and escrow impounds — Homeowner's insurance premiums and property tax reserves collected at closing. Verify these reflect your actual insurance policy and the correct tax rate for your property and ownership classification.
- 5Seller credits and concessions — If the seller agreed to any closing cost credits during the inspection period, confirm they appear correctly on the disclosure. Missing or incorrect credits need to be resolved before you sign.
If anything looks incorrect or unexpected, contact your lender and your Realtor immediately. You have time — use it.