Your Closing Disclosure (and the escrow settlement statement) is the final accounting of your transaction: loan terms, costs, credits, and the exact cash you bring or receive. Reading it line by line catches errors before you sign.
What the Closing Disclosure shows
- Loan terms: amount, rate, monthly payment, and features.
- Projected payments over the loan's life.
- Closing cost details: loan costs and other costs.
- Prepaids and escrow (taxes, insurance).
- Credits from the seller or lender.
- Cash to close: the exact amount you bring.
Reading it line by line
- Verify the loan amount, rate, and term match your lock.
- Compare each fee to your Loan Estimate; question increases.
- Confirm prepaid taxes and insurance.
- Check that agreed seller credits appear.
- Verify prorations for taxes and any HOA dues.
- Confirm the final cash to close.
The three-day rule
For most mortgages, you must receive the Closing Disclosure at least three business days before consummation, giving you time to review and ask questions. Where a number varies, confirm current figures for your transaction.
This is general information, not legal, tax, or financial advice — consult a licensed professional for your situation.
Common things to catch
- Fees that rose beyond allowed tolerances.
- Missing seller or lender credits.
- Incorrect tax or HOA prorations.
- Wrong loan terms vs your lock.
For sellers
Sellers receive a settlement statement showing the sale price, payoff of existing loans, commissions, prorations, and net proceeds. Verify the payoff and credits before signing.
Reviewing before you sign
Use your three-day review window to compare the Closing Disclosure to your Loan Estimate and raise any discrepancy. It's far easier to fix before signing than after.
Frequently Asked Questions
What is a Closing Disclosure?
A standardized form showing your final loan terms, closing costs, credits, and cash to close for a financed purchase.
When do I receive the Closing Disclosure?
For most mortgages, at least three business days before consummation, so you can review it. Where a number varies, confirm current figures for your transaction.
What should I compare it to?
Your Loan Estimate — verify the rate, fees, and that costs didn't rise beyond allowed tolerances.
What is 'cash to close'?
The exact amount of money you need to bring to closing, after credits and prepaids.
Do sellers get a settlement statement too?
Yes — sellers receive a statement showing sale price, payoffs, commissions, prorations, and net proceeds.
What if I find an error?
Raise it immediately with your lender and escrow officer before signing.
