The Closing Disclosure is primarily used for what purpose?

The Closing Disclosure serves a crucial role in the mortgage process by summarizing the terms of the loan. This document is provided to borrowers at least three days before closing on a mortgage, allowing them to fully review and understand the financial aspects of their loan agreement. It details key elements such as the loan amount, interest rate, monthly payment, and the breakdown of costs associated with the loan, including closing costs and other fees. This transparency is essential for borrowers to make informed decisions and ensures they are aware of their financial obligations.

The Closing Disclosure also helps protect consumers by enforcing regulations that require lenders to provide clear and consistent information. By summarizing the loan terms, it empowers borrowers to compare different loan options and verify that all aspects of their agreement have been accurately represented. This level of detail is vital to ensuring that the borrower is confident and clear about what they are committing to financially.