Notes

The Closing Disclosure is designed to provide disclosures to help consumers understand all of the costs of the transaction. This form must be provided to consumers at least three business days before consummation of the loan (closing). The seller's Closing Disclosure can be delivered on the day of closing and is prepared by the settlement agent. The form uses clear language and design to make it easier for consumers to locate key information, such as interest rate, monthly payments, and costs to close the loan.

The Closing Disclosure applies to most closed-end consumer mortgages. It does not apply to home equity lines of credit (HELOCs), reverse mortgages, or mortgages secured by a mobile home or by a dwelling that is not attached to real property (i.e., land). The Closing Disclosure does not apply to loans made by persons who are not considered "creditors."

Several rules of thumb can assist the broker or sales associate in allocating expenses to the parties. The seller is credited with the purchase price and any prepaid items, and he or she is usually debited with any mortgages assumed, paid off or newly created, the broker's commission, his or her attorney's fee, prorated taxes, prorated mortgage interest, prorated rents, security deposits, the state documentary stamp tax on the deed, and owner's title insurance.

The buyer, on the other hand, is generally credited with mortgages assumed or newly created, prorated taxes, prorated mortgage interest, prorated rents, the earnest money deposit, and any security deposits; he or she is then debited with the purchase price, his or her attorney's fee, borrower's title insurance, the state documentary stamp tax on the note, the state intangible tax on the mortgage, and the recording of the deed and mortgage.

Items such as the purchase price, prorated expenses, and mortgages assumed and security deposits are entered twice, as a credit to one party and a debit to the other, whereas expenses such as recording fees, preparation fees, commission, and stamp taxes are only entered once, on the statement of the person being charged with the item. Finally, to calculate how much cash the buyer must pay at closing, subtract his or her credits from his or her debits.

The creditor is required to provide the Closing Disclosure to the consumer at least three business days before the closing. A business day means all calendar days except Sundays and the legal public holidays. The seller's Closing Disclosure can be delivered to the seller on the day of closing and is prepared by the closing agent. The creditor is responsible for delivering the Closing Disclosure form to the consumer, but creditors may use settlement agents to provide the Closing Disclosure, provided that they comply with the rule's requirements.

Page 1 includes: General information, loan terms, projected payments, and costs at closing.
Page 2 includes loan costs and other costs.
Page 3 includes: Calculating cash to close, summaries of transactions, and alternatives for transactions without a seller.
Page 4 includes additional information about the loan.
Page 5 includes: Loan calculations, other disclosures, and contact information.