A closing disclosure form simply outlines the terms and costs of your mortgage, but it’s one of the most important pieces of paperwork to check before closing on a home.
Look at the closing disclosure form as a follow-up form to the loan estimate document you received when you first applied for your loan. The loan estimate outlined the approximate fees you would need to pay if you chose to move forward with the lender. Your closing disclosure is the real deal version of that. So, it’s important to scrutinize and look over the closing disclosure form very carefully.
Here are a few tips to help you when you look over your closing disclosure form:
Closing disclosure vs. settlement statement
The closing disclosure form used to be called a settlement statement. But, more has changed than just the name. Before the settlement statement became the closing disclosure, it was a really long and confusing document that was only required to be distributed to homebuyers on the day of closing, which didn’t give them much time to look over the form and address any issues. Now, the closing disclosure is required to be distributed to homebuyers three days before closing, and the information is all packed into a five-page document.
Compare your closing disclosure with your loan estimate
It’s smart to compare your closing disclosure with your loan estimate while checking for any issues. Most of the numbers and terms should match up or be extremely close, but keep in mind that some may change because weeks or even months may have passed since you applied for your loan. If you didn’t lock in your mortgage interest rates, these rates may have changed.
If there are certain changes that are troubling you, make sure you notify your lender and title or closing company right away. You only have three days to address any issues before closing, so it’s important to act fast. Sometimes, the closing can be postponed so that a new closing disclosure can be sent out with a new three-day review period.
What to check on your closing disclosure form
You need to triple-check your closing disclosure form to make sure everything’s accurate, but here’s a list of things to pay close attention to:
When it comes to looking over your closing disclosure form, the best advice is to pay close attention to even the smallest details and always ask questions if you have any. Your loan officer or real estate agent should be able to give you a line-by-line explanation of the form if you need it.