Closing Disclosure
The Closing Disclosure, a five-page document that outlines the key aspects of your mortgage loan. It includes information about the purchase price, loan fees, and interest rate. Insurance, closing costs, and estimated real estate taxes. It is important to read it carefully. In fact, it is one of the most important steps in purchasing a house.
Understanding Your Closing Disclosure Is Important
It is important to fully understand the terms of any loan you are considering before you sign. This is because once you sign, it's a binding agreement to all terms and conditions, no matter what the paperwork may contain.
It is important that you read the Closing Disclosure sent by your lender. The Closing Disclosure is one of the last forms you will receive before closing on your new loan. It lists the terms and costs of your mortgage. This allows you to compare these to the Loan Estimate you received at the beginning.
The Closing Disclosure, like all mortgage forms can be confusing to read, especially if it's not clear what you should look for. This article will explain everything you need to know about the Closing Disclosure. This will ensure that you are clear when signing. A good agent will also be able to help you go through the Closing Disclosure and correct any mistakes. This is only one reason to use a licensed real estate agent for buying or selling a house.
What Are The Closing Costs Amount
Closing costs may amount to 3% -6% of the property's price. If you get a mortgage for $200,000, closing costs can be as high as $6,000 to $12,000.
Your down payment is not included in closing costs. You may be able to negotiate with the seller to cover some or all of your closing costs when you buy a home.
The Closing Disclosure 3-Day Rule
The law requires that your lender gives you the standard Closing Disclosure at minimum 3 days prior to closing. This is the Closing Disclosure 3-day Rule. This is due to the TILA–RESPA Integrated Disclosures guidelines that went into effect October 3, 2015.
Before these rules were implemented, home buyers received two documents: the HUD-1 Settlement Statement, and the Truth in Lending Disclosure Statement. These documents had two problems: they were confusing and they were provided only at closing, which left home buyers with very limited opportunity to read and understand them.
Closing Disclosure's 3-day rule gives you ample time to review the final terms of your loan before signing your closing documents.
The 3-day rule makes it relatively easy to predict the sequence of events that will lead up to you receiving a closing disclosure. Lenders try to avoid issuing Closing Disclosures before they know the exact closing costs and fees. They don't want the agreement to be changed and to wait 3 more days. The Closing Disclosure will not be issued until you have received approval, insurance, and an estimate.
This Is The Timeline:
All costs are calculated.
The Closing Disclosure Form is issued.
The 3-day rule is in effect.
Sign the form.