14. When Do I Get My Loan Closing Disclosure?

by Local Title

As you approach the final stages of your real estate transaction, you may wonder when you’ll receive your Loan Closing Disclosure and what information it will contain. Here’s a breakdown of what borrowers need to know about the timing and content of the Loan Closing Disclosure:

Timing of Disclosure

If your loan proceeds from the initial Loan Estimate to closing, creditors are required to provide a Closing Disclosure form documenting the actual transaction terms and costs. This disclosure must be provided to borrowers at least three business days before loan consummation. Whether delivered in paper or digital format, the Closing Disclosure must only include information specified by the Consumer Financial Protection Bureau (CFPB).

Revisions to Disclosure

In the event that terms or costs change prior to loan consummation, the creditor must provide a corrected disclosure containing the updated terms. Depending on the nature of the changes, this may trigger an additional three-business-day waiting period before consummation. This ensures that borrowers have ample time to review and understand any modifications to the loan terms and associated costs.

Distinction Between Consummation and Closing

It’s important to note the legal distinction between consummation and closing, as they may occur simultaneously or separately depending on applicable state laws. Consummation occurs when borrowers become contractually obligated to the creditor on the loan, not necessarily when the real estate transaction closes. The Closing Disclosure must be delivered three business days prior to the legal consummation date, providing borrowers with sufficient time to review the final terms and costs before committing to the loan agreement.

Content of the Disclosure

The Loan Closing Disclosure contains essential information about the loan transaction, including the loan terms, closing costs, and other pertinent details specified by the CFPB. By carefully reviewing the disclosure, borrowers can ensure that the terms and costs align with their expectations and financial capabilities.

Ensuring Transparency and Compliance

The Loan Closing Disclosure process is designed to promote transparency and compliance in real estate transactions. By providing borrowers with detailed information about the loan terms and costs well in advance of consummation, creditors enable borrowers to make informed decisions and avoid any last-minute surprises.

The Loan Closing Disclosure plays a crucial role in the final stages of the real estate loan process, providing borrowers with comprehensive information about the transaction terms and costs. By adhering to disclosure requirements and ensuring timely delivery of the Closing Disclosure, creditors facilitate transparency and empower borrowers to proceed with confidence toward loan consummation.