Mortgage Closing Disclosure: Purpose, Features and Timing
There are several documents or items that might be important during your mortgage application, home search and eventual home purchase, and one of these is known as the closing disclosure. Sent to mortgage borrowers by their lender near the closing date on a mortgage, the closing disclosure is a way of allowing borrowers to verify and double-check important information, plus holds some other purposes as well.
At Primary Residential Mortgage, we’re happy to help our clients with a wide variety of areas for any of our home loans offered, which range from conventional loans to programs like FHA loans, VA loans and many others. In this two-part blog series, we’ll go over everything you might need to know about a closing disclosure – why it’s sent, its typical length and features, the timing for a standard closing disclosure and several other factors to be aware of as you approach closing day.
Closing Disclosure Basics and Purpose
A closing disclosure is a relatively simple document that’s meant to lay out all the terms of your loan in a simple, straightforward way. It is prepared by your lender and will be sent in advance of your closing day itself.
Really, the closing disclosure is meant as a way of allowing borrowers to check all their work. You’ll confirm every detail of the arrangement is correct, from items like your credit score and monthly income down to the specifics of the loan repayment process and more.
Typical Disclosure Length and Features
In most standard mortgage situations, the closing disclosure will be five pages in length. It will cover the following areas:
- Basic loan terms, such as interest rate, loan repayment period and more
- Projected monthly payments across the life of the loan
- All closing costs, plus whether these are paid separately or rolled into the mortgage amount
- A transaction summary
- Any further information required about the loan
Closing disclosures will be made on standardized forms, with copies generally made for the lender and possibly other parties as well.
Closing Disclosure Timing
By law, lenders are required to send their borrowers a closing disclosure no later than three days before closing day. This is so that borrowers have enough time to check the entire disclosure for any errors.
If you do find mistakes on the closing disclosure, you should immediately contact your lender to reduce any delays in closing, which can occasionally be costly. In some cases, borrowers will compare the details of their closing disclosure with their final loan estimate, as this is a simple way to spot inconsistencies.
For more on the closing disclosure in a mortgage situation, or to learn about any of our mortgage loan programs or services, speak to the staff at Primary Residential Mortgage today.
*PRMI NMLS 3094. PRMI is an Equal Housing Lender. Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. Programs, rates, terms, and conditions are subject to change and are subject to borrower(s) qualification. This is not a commitment to lend. Opinions expressed are solely my own and do not express the views of my employer.
