WHAT IS A CLOSING DISCLOSURE & WHAT SHOULD I LOOK FOR?
If you’re getting a mortgage, you’re going to receive a document called a Closing Disclosure.
And yes, it’s a lot of pages.
And yes, it can look intimidating.
But don’t just sign it because someone tells you everything is fine.
Read it.
Ask questions.
Understand what you’re signing.
What Is a Closing Disclosure?
The Closing Disclosure, often called the CD, provides important details about your mortgage loan, including the loan terms, projected monthly payments and closing costs.
For most mortgage loans, federal rules require you to receive the Closing Disclosure at least three business days before closing. Consumer Financial Protection Bureau: Closing Disclosure
That three-day period is important.
It gives you time to review the numbers before you sit down at the closing table.
What Should You Look At?
Start with the big things.
Loan Amount
Does the loan amount look correct?
Interest Rate
Does the interest rate match what you were expecting?
Monthly Payment
Does the projected payment make sense?
Remember that your total monthly housing cost may include more than principal and interest.
Closing Costs
Look carefully at the fees and other costs associated with your loan and closing.
Cash to Close
This is one of the numbers I especially want you to understand.
How much money are you actually expected to bring to closing?
Don’t wait until closing day to find out.
What If Something Looks Wrong?
Ask.
Seriously.
If the purchase price is wrong…
If the loan amount is wrong…
If the credits don’t look right…
If the cash-to-close number doesn’t make sense…
If something changed and you don’t understand why…
Stop and ask questions.
You don’t want to discover a problem while you’re sitting at the closing table with everyone waiting for you to sign.
And Here’s Something Important
The Closing Disclosure is about your mortgage and closing costs, but it doesn’t mean you should review the entire transaction alone.
Depending on where you’re buying, you may have a lender, attorney, title/closing company and real estate professionals involved.
Use your team.
Ask questions.
Make sure you understand what you’re signing.
My Favorite Rule
If you don’t understand it, don’t be embarrassed to ask.
You are not supposed to be a mortgage expert.
You are not supposed to be a real estate attorney.
You’re buying a home.
Your job is to ask questions.
Our job is to help you understand the process and know who to ask when something falls outside our role.
Have a Question?
Buying a home comes with a lot of questions. You don’t have to figure everything out on your own.
Have a question about something you read here? Want to talk through your situation? Or just not sure what your next step should be?
I’m happy to help.
Schedule a Time to Talk With Karyn
No pressure. No obligation. Just straight answers.
Prefer to just send me a question?