The Closing Disclosure (CD) is the federally mandated five-page form that itemizes every dollar of a residential mortgage transaction. Under the TILA-RESPA Integrated Disclosure (TRID) rule, your lender must deliver it at least three business days before closing. This is the document that determines how much money leaves your account at the closing table — and it almost always contains at least one error worth catching.

The three-day rule

The CD must reach you at least three business days before consummation. Significant changes (APR change > 1/8%, loan product change, prepayment penalty added) reset that clock. Do not waive the three-day window unless your closing attorney specifically advises it for a documented reason.

Page 1: The headline numbers

The top of page 1 lists Loan Terms, Projected Payments, Costs at Closing.

  • Loan Amount — the principal financed.
  • Interest Rate — your locked rate. Confirm this matches your Loan Estimate (LE) or rate-lock agreement.
  • Monthly Principal & Interest — should match what your lender quoted on the LE.
  • Prepayment Penalty / Balloon Payment — both should be "NO" for a standard owner-occupied loan.
  • Costs at Closing — Total Closing Costs and Cash to Close. Compare these to the LE; differences over a few hundred dollars deserve an explanation.

Page 2: Loan Costs and Other Costs

This is where most errors live.

  • Origination Charges (Section A) — lender fees you cannot shop for: origination, application, underwriting, processing. Compare line by line to LE Section A. By rule, these cannot increase from the LE without a Changed Circumstance.
  • Services You Cannot Shop For (Section B) — appraisal, credit report, flood determination. Same rule.
  • Services You Can Shop For (Section C) — title insurance, survey, pest. If you used the lender's preferred provider, these may have moved up to 10% from the LE; if you used your own provider, the cap does not apply.
  • Taxes and Government Fees (Section E) — recording fees and transfer taxes.
  • Prepaids (Section F) — homeowners insurance (12 months), mortgage interest (partial month), property tax (varies by state).
  • Initial Escrow Payment (Section G) — funds the escrow account for taxes and insurance.
  • Other (Section H) — owner's title insurance (often optional), home warranty, HOA fees.

Page 3: Calculating Cash to Close and Summaries

Page 3 reconciles the Loan Estimate to the Closing Disclosure column by column. Any line marked "YES" under "Did this change?" requires a written explanation.

The Summaries of Transactions section has two columns: Borrower's Transaction (left) and Seller's Transaction (right).

For the borrower: - Sale Price of Property — confirm matches contract. - Adjustments for items paid by seller in advance — typically prorated property taxes if the seller paid the year ahead. - Closing Costs Paid at Closing. - Existing loans assumed — almost always $0. - Adjustments for items unpaid by seller — prorated taxes for the portion of the year the seller occupied. - Cash to Close at the bottom.

For the seller, mirror image: sale price minus payoff of existing mortgages, commission, prorations, and seller-paid closing costs equals net proceeds.

Page 4: Loan Disclosures

Page 4 covers loan-specific disclosures: assumability, demand feature, late payments, negative amortization, partial payments, security interest, escrow account details. Most should be "NO" for a standard 30-year fixed.

The Escrow Account section shows your monthly escrow payment for taxes and insurance and the projected first-year escrow balance.

Page 5: Loan Calculations and Other Disclosures

  • Total of Payments — the sum of every payment over the loan life. Eye-opening on a 30-year mortgage.
  • Finance Charge — total interest plus prepaid finance charges.
  • APR — the all-in rate. APR substantially higher than the note rate often signals high upfront costs.
  • Total Interest Percentage (TIP) — total interest as a percentage of loan amount over the loan life.

What to question

When you receive the CD:

  1. Compare every section to the LE. Anything that moved up needs a Changed Circumstance reason in writing.
  2. Verify per diem interest — make sure the closing date matches what is calculated.
  3. Confirm escrow amounts match your homeowners insurance binder and last year's tax bill, with any reasonable adjustment.
  4. Check title premium against the title company's rate quote.
  5. Verify all credits (seller concessions, lender credits, agent rebates if applicable) appear on the correct lines.

If anything is off, call your loan officer and your closing attorney immediately. The three-day window exists exactly for this — corrections are routine, but unraised errors become signed contracts.