The closing disclosure (CD) is a standardized five-page document that provides the final, detailed accounting of your mortgage loan terms and all closing costs for the transaction. It replaced the older HUD-1 Settlement Statement for most residential mortgage transactions in October 2015 as part of the TILA-RESPA Integrated Disclosure (TRID) rules. Under federal law, lenders must provide the CD to borrowers at least three business days before closing, giving you time to review every number before committing.
The CD contains five pages of critical information. Page 1 summarizes the loan terms — loan amount, interest rate, monthly payment, whether the rate can increase, whether there is a prepayment penalty, and whether there is a balloon payment. Page 2 details all closing costs, organized into categories: loan costs (origination charges, services you did not shop for, services you did shop for) and other costs (taxes, prepaids, initial escrow deposits). Page 3 calculates the cash to close for the buyer and the net proceeds for the seller.
Pages 4 and 5 provide additional details: the loan disclosure (assumptions, demand feature, late payment provisions, refinance information), the escrow account details, the total cost of the loan over its full term (total of payments, finance charge, amount financed, APR), and contact information for the lender, real estate brokers, and settlement agent. These pages also include the important "Comparisons" section showing your costs side by side with your initial Loan Estimate.
Borrowers should carefully review the CD and compare it to the Loan Estimate received at application. Certain costs have "tolerance" limits — meaning they cannot increase beyond certain thresholds. Fees with zero tolerance (like origination charges) cannot increase at all. Fees with 10% tolerance (like title services and recording fees when the lender selected the provider) can increase by no more than 10% collectively. If tolerances are exceeded, the lender must cure the excess within 60 days of closing by refunding the difference.
At Beycome Title, our closing coordinators review the CD with every buyer before closing day, explaining each line item in plain language and answering any questions. We believe no one should sign documents they don't fully understand. If you spot a discrepancy or have concerns, we work with the lender to resolve them before closing. Get your free quote and experience our transparent, borrower-first approach to closing.