What does a closing disclosure provide the borrower?

A closing disclosure is a critical document in the mortgage process that offers the borrower a comprehensive overview of the final terms and costs associated with their mortgage transaction. It serves as a detailed breakdown of all the financial aspects, including loan terms, monthly payments, and an itemized list of closing costs, enabling the borrower to understand their financial obligations before finalizing the loan.

The closing disclosure ensures that borrowers have all necessary information to compare with the initial loan estimate they received earlier in the process. This transparency is crucial in helping them make informed decisions regarding their mortgage agreement. By informing borrowers of the final terms, it helps prevent any surprises at the closing table and ensures compliance with federal regulations designed to protect consumer interests in the mortgage process.