What is the "Closing Disclosure" (CD)?

The Closing Disclosure (CD) is a critical document in the mortgage process that provides a detailed summary of the final terms of the loan and the associated closing costs. It is designed to give borrowers a clear understanding of what they are agreeing to before the closing of the loan. This document outlines important financial details, including the loan amount, interest rate, monthly payments, and the total closing costs, allowing borrowers to compare these figures with the Loan Estimate they received earlier in the process.

By summarizing these key loan details, the Closing Disclosure supports informed decision-making for the borrower, ensuring they know what to expect financially at closing. The requirement for lenders to provide this document at least three business days before the closing date is also designed to facilitate transparency and give borrowers enough time to review the information and ask questions if needed. This enhances the overall clarity and reliability of the mortgage transaction.