Closing disclosure? What’s that?

The Closing Disclosure is a document that spells out every last cent and every commitment you’re about to make before you officially become a homeowner. 

Here’s an example of what it looks like, so that you have an idea of what to expect. 

Here’s what’s inside:

  • Loan Terms – This is the headline: how much you’re borrowing, the interest rate, and how long you’re locked in for. For example, it’ll show if you’re dealing with a $300,000 loan at a 5% fixed rate over 30 years. Make sure these numbers match what you agreed to earlier.
  • Monthly Payments – This section breaks down what you’ll be paying each month, not just your loan, but taxes, insurance, and any extras. So, if you thought you’d be paying $1,600 a month, but it’s $1,800 here—something’s off. This is where you find out how much your actual monthly hit will be.
  • Closing Costs – Here’s the bill. It’s a breakdown of fees you might have heard about but not thought too much about until now. This includes lender fees (unless you’re at Tomo Mortgage, we don’t do those here), title insurance, and other required fees. 
  • Prepaid Costs and Escrow: These are upfront payments for property taxes, homeowner’s insurance, and sometimes mortgage insurance. Think of it like pre-loading your escrow account so you’re covered from day one.
  • Cash to Close: This is the final number you need to bring to the table—your down payment and closing costs combined. If you’ve been budgeting for $20,000 and this number shows $23,000, it’s time to dig into where the extra $3,000 is coming from. It’s crucial to match this with what you’ve been preparing for, so there are no last-minute cash scrambles.
  • Loan Fees: Keep an eye on those sneaky fees, like origination fees or points (if you’re buying down your rate). Make sure these match what you discussed earlier.
  • Adjustments and Credits: Sometimes you get credits from the seller for things like prepaid property taxes or repairs they promised. Make sure those are included, and the final numbers reflect any agreements.
  • Legal Info: Everything from your lender’s name to the legal description of the property needs to be correct. Mess this up, and you could be in for headaches later.
  • Signatures and Dates: Don’t forget the fine print—every signature and date needs to be there, including yours and the closing agent’s.

You’ll get this Closing Disclosure at least three business days before closing. Think of it like the final playbook before the big game—it gives you time to go through everything and make sure there aren’t any curveballs. Spot a problem? Speak up now, because once you sign, those numbers are locked in.

Closing disclosure vs. loan estimate? Same same or different?

Now, what’s the difference between this and the Loan Estimate? The Loan Estimate was the teaser trailer, showing you the rough numbers. The Closing Disclosure is the full movie, giving you the exact terms, costs, and any changes that might’ve happened along the way.

Is the closing disclosure final?

Can the numbers in the Closing Disclosure still change? In most cases, it’s set in stone, but sometimes there are last-minute adjustments. Say the appraisal came in lower than expected, or there’s a last-minute tax adjustment. If there’s a big change, you’ll get a heads-up.

If you’re ready to start your journey to homeownership, get pre approved with Tomo Mortgage today.

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