What is a lender closing disclosure?

The lender closing disclosure is the standardized form created by the Consumer Financial Protection Bureau that replaced the old HUD-1 Settlement Statement. It is required by federal law for most mortgage transactions. The disclosure includes the loan terms, projected payments, closing costs, and the amount of cash you need to close. You must receive the Closing Disclosure at least three business days before closing. This waiting period is called the review period and gives you time to review the terms and ask questions. If significant changes occur, such as the interest rate changing or the loan product changing, a new three-day waiting period may be triggered. The Closing Disclosure is prepared by the lender and sent to you, your agent, and the closing agent. It is the document you will reference at closing when you sign your final loan documents. Compare it carefully to your Loan Estimate and note any changes.