Closing Disclosure
A standardized five-page federal form lenders provide to borrowers three business days before mortgage closing, detailing all final loan terms and costs.
What is Closing Disclosure?
A Closing Disclosure (CD) is a federally mandated form required under the TRID (TILA-RESPA Integrated Disclosure) rules introduced by the Consumer Financial Protection Bureau in 2015. Lenders must deliver the CD to borrowers at least three business days before closing, replacing the older HUD-1 Settlement Statement. The five-page form details the final loan amount, interest rate, monthly principal and interest payment, total closing costs itemized by category (origination charges, third-party services, prepaid items, and initial escrow payment), cash required at closing, and APR. The mandatory review period gives borrowers time to compare the CD against their Loan Estimate to identify any unexpected changes. Certain changes—such as increases in third-party fees above tolerance thresholds—reset the three-day clock, requiring lenders to issue a revised CD.
Example
A buyer purchasing a $450,000 home with a $360,000 mortgage receives a Closing Disclosure three business days before settlement. The CD shows: loan amount $360,000 at 6.875% fixed for 30 years, monthly P&I $2,363.64, total closing costs $9,240 (including a $1,800 origination fee, $650 appraisal, $1,200 title services, and $4,800 prepaid interest and escrow), and cash to close $99,240 ($90,000 down payment plus closing costs). Comparing to the original Loan Estimate, the buyer confirms all fees are within allowable tolerance limits.
Source: Consumer Financial Protection Bureau — Closing Disclosure Explainer