Navigating the Closing Disclosure: A Step-by-Step Guide for Buyers and Sellers

Understanding the Closing Disclosure is crucial in the real estate transaction process. This document, provided at least three days before closing, outlines the final terms and costs associated with your mortgage. Here's a line-by-line guide to help you navigate each section and ensure accuracy.

Understanding the Loan Terms

The Loan Terms section provides details like the loan amount, interest rate, and monthly principal and interest payments. Ensure these numbers align with what you've agreed upon with the lender.

Projected Payments

This section breaks down your expected payments over the life of the loan, including any increases. Verify these figures to ensure there are no surprises.

Costs at Closing

Closing Costs and Cash to Close provide the total settlement amount required at closing. Check that these numbers match your understanding and expectations.

Common Fees Explained

• Origination Charges: Fees for processing the loan, often including application and underwriting costs.
• Services You Cannot Shop For: Fees for services like credit reporting and appraisals.
• Services You Can Shop For: Fees where you can choose providers, such as title services or pest inspections.
• Prepaids: Costs like homeowner's insurance and property taxes paid at closing.
• Initial Escrow Payment at Closing: Reserves for future payments, like taxes and insurance premiums.

Spotting Errors

Errors can occur, so meticulously review items for discrepancies, such as incorrect loan terms or unexpected fees. If anything looks off, inquire immediately to avoid last-minute issues.

Call to Action

If you're navigating the complexities of a Closing Disclosure, consider seeking professional guidance. Our real estate closing attorney can review your closing statement to ensure everything is in order. Contact us today to schedule a consultation and prevent future complications.

Understanding your Closing Disclosure is an essential step in securing your investment. With the right insights and support, you can approach closing day with confidence.