Guide to Completing the Closing Disclosure
The following list highlights requirements needed to complete each section of the Closing Disclosure (CD).
Page 1
Closing Information
Date Issued
•
Date the CD is mailed or delivered to the borrower
Closing Date
•
Date of consummation
Disbursement
Date
•
Date the funds are expected to be paid as a result of this loan transaction
Settlement Agent
•
Name of the settlement agent conducting the closing
File #
•
Number assigned to the transaction by the settlement agent
Property
•
Address of the property that will secure the transaction
Sale Price/
Appraised Value
•
•
If the loan is a purchase, use Sale Price
If the loan is a refinance, use Appraised Value
Transaction Information
•
Borrower
Each borrower’s name and mailing address
Seller
•
Each seller’s name and mailing address
Lender
•
Name of the creditor
•
•
•
In whole years (i.e. 30 years)
More than 24 months, but NOT whole years (i.e. 15 yr., 5 mo.)
Less than 24 months, but NOT whole years (i.e. 22 mo.)
Purpose
•
Purchase, Refinance, Construction, or Home Equity Loan
Product
•
Any feature that may change the periodic payment and duration (Negative
Amortization, Interest Only, Step Payment, Balloon Payment, etc.)
Whether an adjustable, step, or fixed rate is used to determine interest rate
Loan Information
Loan Term
•
Loan Type
•
Conventional, FHA, VA, or brief description if loan is insured or guaranteed by another
federal or state agency
Loan ID
•
•
Creditor’s loan number
Must match the Loan Estimate
MIC #
•
Case number for any mortgage insurance policy
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Loan Terms
Loan Amount
•
•
In whole dollars
Indicate whether items can change after closing
• Answering “Yes” requires additional information:
• Indication of maximum principal balance for the transaction,
• Due date (year or month in which it occurs rather than exact date)
• Whether that maximum balance may occur under the terms of the
legal obligation
Interest Rate
•
•
Initial interest rate that is applicable at consummation
Indicate whether items can change after closing
• Answering “Yes” requires additional information:
• Disclosure of frequency of interest rate adjustments,
• The date the interest rate may first adjust,
• The maximum interest rate, and
• The first date when the loan can reach the maximum interest rate
(year in which the event occurs, counting from the date that the
interest for the first scheduled periodic payment begins to accrue
after consummation)
• The Adjustable Interest Rate (AIR) Table on page 4
Monthly Principal &
Interest
•
•
Initial principal and interest payment due under the terms of the loan
Indicate whether payment can change after closing
• Answering “Yes” requires additional information:
• Disclosure of frequency of payment adjustments,
• The date the principal and interest payment may first adjust,
• The maximum payment possible, and
• The first date when the loan can reach the maximum payment.
Prepayment Penalty
•
Balloon Payment
•
Answering “Yes” requires additional information:
• Indicate the maximum amount and
• Date when the period during which the penalty may be imposed terminates
Answering “Yes” requires the amount and due date of such payment
Projected Payments
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Estimated Total
Monthly Payment
•
•
•
Estimated Taxes,
Insurance &
Assessments
•
•
Disclose in one column the initial Period Payment for Principal & Interest,
Mortgage Insurance, Estimated Escrow and Estimated Total Monthly
Payment.
Depending on the features of the loan, subsequent payments also may be
required to be disclosed.
Refer to discussion of the standards that must be met for completing this
chart in pages 21-27 of the TILA – RESPA Integrated Disclosure – Guide to
the Loan Estimate and Closing Disclosure forms
Disclose the total monthly amount due for Property Taxes, Homeowner’s
Insurance, HOA fees and certain insurance premiums or charges, if required
by the lender.
Include these amounts even if an escrow account will not be established
Costs at Closing
Closing Costs
•
The total amount disclosed as Total Closing Costs in the Other Costs table
disclosed on page 2 of the CD.
Cash to Close
•
The estimated amount of cash the borrower will pay at, or receive from,
closing.
This amount is the same as the Cash to Close calculated in the Calculating
Cash to Close table on page 3 of the CD.
•
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Page 2
Loan Costs
•
A. Origination
Charges
B. Services Borrower
Did Not Shop For
•
•
•
The items disclosed in the Origination Charges section should generally be the
same as they were disclosed on the LE, updated to reflect the terms of the
legal obligation at consummation, except:
• Loan originator compensation is disclosed on the CD, even though it is
not disclosed on the LE
• Borrower paid compensation to a third-party loan originator is
designated as Borrower-Paid At Closing or Before Closing
• Lender paid compensation to a third-party loan originator is
designated as Paid by Others
• Compensations to individual loan originators is not disclosed
on the CD
Services provided by third parties that borrower was not allowed to select, and
Services that the borrower could have shopped for, but did not, regardless of
where the item was disclosed on the LE.
• If the borrower was provided a written list of service providers and the
borrower selected a provider from the list, the fee for the service
should be disclosed in section B on the CD.
Any title-related service or charge must be preceded with the word “Title-” at
the beginning
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C. Services Borrower
Did Shop For
•
•
•
•
D. Total Loan Costs
Services provided by third parties that borrower was allowed to select
A written list of settlement service providers that the borrower can consider
when choosing a service (can be as little as one option for each; no limitations
on number you have to list), must be provided with the initial LE in order to
consider a fee shoppable.
Any title-related service or charge must be preceded with the word “Title-” at
the beginning.
Sum of the amounts of Origination Charges, Services You Cannot Shop For, and
Services You Can Shop For, disclosed as Borrower-Paid
Other Costs
E. Taxes and Other
Government Fees
•
An itemization of each amount that is expected to be paid to State and local
governments for taxes and government fees
F. Prepaids
•
Include: Homeowner’s Insurance, Mortgage Insurance, Prepaid Interest,
Property Taxes (all four of which are preprinted on form), and space for
additional items, as needed
Must include the applicable time period covered by the amount paid and
total amount to be paid
•
G. Initial Escrow
Payment at Closing
•
•
The amount the creditor will require the borrower to place into an escrow
account at consummation to be applied to recurring charges for property
taxes, homeowner’s and similar insurance, mortgage insurance, HOA dues,
and other periodic charges.
Must include the monthly payment amount and number of months collected
at closing.
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H. Other
•
An itemization of charges that are required or obtained in the real estate closing
by the borrower, seller, or other party that are in addition to the charges disclosed
in the other sections
Items that may go here: Real estate commissions, separate insurance, warranty,
guarantee or event- coverage products (Owner’s title insurance, credit life
insurance, debt suspension/cancellation coverage, warranties of home appliances
& systems)
Items that disclose any premiums paid for separate insurance, warranty,
guarantee, or event-coverage products that are NOT required by creditor
MUST include “(optional)” at the end of label
Any title-related service or charge must be preceded with the word “Title-” at
the beginning
•
•
•
I. Total Other Costs
(Borrower-Paid)
•
Sum of the subtotals of Taxes and Other Government Fees, Prepaids,
Initial Escrow Payment at Closing, and Other
J. Total Closing Costs
(Borrower-Paid)
•
•
Sum of Total Loan Costs, Total Other Costs, and Lender Credits
When the borrower receives a generalized credit from the creditor for
closing costs, the amount of the credit must be disclosed here as Lender
Credits.
• If such a credit is designated for a specific loan cost or other cost,
that amount should be reflected in the Paid by Others column in the
Closing Cost Details tables and can be designated with an “(L)”.
Page 3
Calculating Cash to Close
Total Closing Costs
•
Same as the amount disclosed as J. Total Closing Costs in the Other Costs
Section on page 2 of the CD
Closing Costs Paid
Before Closing
•
Same amount designated as Borrower-Paid Before Closing in the
Closing Costs Subtotals of the Other Costs table on page 2 of the CD
Closing Costs
Financed (Paid from
Your Loan Amount)
•
List the actual amount of the closing costs that are to be paid out of
loan proceeds, if any, stated as a negative number.
6
Down
Payment/Funds
from Borrower
•
•
Purchase transaction
• Difference between purchase price and principal amount of credit
extended, disclosed as a positive number
• If loan amount exceeds purchase price, disclose $0
Non-purchase transaction
• Difference between principal amount of credit extended and the total
amount of all existing debt being satisfied in transaction
• If positive number, use as your Down Payment
• If negative or $0, report $0
Deposit
•
Only occurs in purchase transaction where borrower has paid money in
advance to seller, trust, or escrow held by an attorney/other party under
terms of the purchase contract
Funds for Borrower
•
•
Seller Credits
•
The amount to be disbursed to the borrower at the time of consummation.
Determined by subtracting from the total amount all existing debt being
satisfied in the transaction. It is disclosed as either a negative number or
$0.
The amount of funds given by the seller to the borrower for generalized credits for
closing costs or for allowances for items purchased separately.
Seller credits are distinguished from payments by the seller for items attributable to
periods of time prior to consummation, which are listed under “Adjustments and
Other Credits”.
•
Adjustments and
Other Credits
•
•
Cash to Close
•
Calculated by taking the amounts in Section K: Adjustments for Items Paid by
Seller in Advance and subtracting Section L: Other Credits, Adjustments, and
Adjustments for Items Unpaid by Seller
May include: proration of taxes or HOA fees, utilities used but not paid for by the
seller, rent collected in advance by the seller from a tenant for a period extending
beyond the consummation, and interest on loan assumptions.
Sum of the amounts disclosed above
Summaries of Transactions – Borrower’s Transaction
K. Due from Borrower
at Closing
•
Sum of Sale Price of Property, Sale Price of Any Personal Property Included in
Sale, Closing Costs Paid at Closing (Section J), Other consumer charges not
previously disclosed on page 2 of the CD, Adjustments, and Adjustments for Items
Paid by Seller in Advance
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L. Paid Already by or
on Behalf of Borrower
at Closing
•
Sum of Deposit, Loan Amount, Existing Loan(s) Assumed or Taken Subject to,
Seller Credits not previously disclosed on page 2, Other Credits not previously
disclosed on page 2, and Adjustments for Items Unpaid by Seller
Cash to Close To/From
Borrower
•
Under the Calculation subheading:
• Disclose Total Due from Borrower at Closing (K) as a positive number
• Disclose Total Paid Already by or on Behalf of Borrower at Closing (L)
as a negative number
Disclose the sum as Cash to Close From Borrower when the result is a positive
number, and disclose the sum as Cash to Close To Borrower when the result is
a negative number. Either way, the sum is shown as a positive number on the
disclosure.
•
Summaries of Transactions – Seller’s Transaction
M. Due to Seller at
Closing
•
Sum of Sale Price of Property, Sale Price of Any Personal Property Included in
Sale, Adjustments, and Adjustments for Items Paid by Seller in Advance.
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N. Due from Seller at
Closing
•
Sum of Excess Deposit, Closing Costs Paid at Closing by Seller, Existing Loan(s)
Assumed or Taken Subject to, Payoff of First Mortgage Loan, Payoff of Second
Mortgage Loan, Payment of other seller obligations, Seller Credits not previously
disclosed on page 2, Adjustments, and Adjustments for Items Unpaid by Seller
Cash From/To Seller
•
Under the Calculation subheading:
• Disclose Total Due to Seller at Closing (M) as a positive number
• Disclose Total Due from Seller at Closing (N) as a negative number
Disclose the sum as Cash to Seller when the result is a positive number, and
disclose the sum as Cash from Seller when the result is a negative number.
Either way, the sum is shown as a positive number on the disclosure.
•
Page 4
Loan Disclosures
Assumption
Information About This
•
Information concerning future assumption of the loan by a subsequent
purchaser
9
Demand Feature
•
Whether the legal obligation contains a demand feature that can require early
payment of the loan
Late Payment
•
The terms of the legal obligation that impose a fee for a late payment including
the amount of time that passes before a fee is imposed and the amount of the
fee or how it is calculated
Negative Amortization
•
Whether the regular periodic payments can cause the principal balance of the
loan to increase, creating negative amortization
Partial Payments
Security Interest
•
•
The creditor’s policy in relation to partial payments by the consumer
A statement that the consumer is granting a security interest in the property,
along with identification of the property
10
Escrow Account
•
•
•
•
When an escrow account is established, disclose:
• Amount of Escrowed Property Costs over Year 1, with a list of the
costs that will be paid by the Escrow Account,
• Amount of Non-Escrowed Property Costs over Year 1, with a list of the
costs that will not be paid by the Escrow Account,
• Initial Escrow Payment, and
• Monthly Escrow Payment.
When an escrow account is not established, disclose:
• Amount of Estimated Property Costs over Year 1, and
• Amount of any Escrow Waiver Fee imposed for waiving the creation of
an escrow account.
Property Costs include:
• Property Taxes, Homeowner’s Insurance, HOA dues, Ground rent,
Leasehold payments, and certain insurance premiums or charges, if
required by the lender.
The Initial Escrow Payment is the same amount disclosed as the subtotal of the
Initial Payment at Closing on page 2 of the CD.
11
Adjustable Interest Rate (AIR) Table
Adjustable Interest
Rate (AIR) Table
•
•
Used only when the loan’s interest rate may INCREASE after consummation
The same information that was disclosed in the AIR Table on the LE is disclosed
in the AIR Table on the CD, updated to reflect the terms of the loan at
consummation
Index and Margin
•
Initial Interest Rate
•
The index in which adjustments to the interest rate will be based and the margin
that is added to the index to determine the interest rate
Initial Interest Rate at consummation
Minimum/Maximum
Interest Rate
•
•
Change Frequency
•
•
Limits on Interest
Rate Changes
•
If no maximum interest rate specified in contract, disclose any maximum rate
specified in any applicable state law (i.e. State usury law)
If no minimum interest rate specified in contract or in State law, your margin will
serve as minimum interest rate
For First Change, list the month when the first interest rate change may occur
after closing.
For Subsequent Changes, list the frequency of interest rate adjustments after
the initial adjustment.
If multiple limits apply at different points in time or based on different
circumstances, you must disclose the greatest limit on changes in the interest
rate when making these disclosures
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Page 5
Loan Calculations
Total of Payments
Total Interest
Percentage (TIP)
•
List the total dollar amount the borrower will have paid through the end of the
loan term after the due date of the first periodic payment:
• Principal
• Interest
• Mortgage Insurance
• Loan Costs – already disclosed on Page 2, Item D under Loan Costs
•
Total amount of interest the borrower will pay over the loan term, expressed
as a percentage of the loan amount.
Use the same standards used when calculating the amount of the interest
component of Finance Charges for your old Fed Box Reg Z disclosures.
•
Other Disclosures
Appraisal
•
A statement related to the consumer’s rights in relation to any appraisal
conducted for the property must be provided for Higher-priced Mortgage Loans
(HPML), and Loans covered by the Equal Credit Opportunity Act (ECOA).
Contract Details
•
A statement informing the consumer of consequences of nonpayment, what
constitutes default, when a creditor can accelerate maturity, and prepayment
rebates and penalties pursuant to contract details
Liability After
Foreclosure
•
Must include in the Other Considerations disclosures if the purpose of the credit
transaction is to refinance an extension of credit, a brief statement that certain
State law protections against liability for any deficiency after foreclosure may be
lost, the potential consequences of the loss of such protections, and a
statement that the borrower should consult an attorney for additional
information
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Refinance
•
A statement concerning the consumer’s ability to refinance the loan
Tax Deductions
•
A statement concerning the extent that interest on the loan can be included as
a tax deduction by the borrower
Loan Acceptance
•
Must be included only in circumstances where page 5 does not contain a Confirm
Receipt section which includes a similar type of disclosure to applicant
Must read as follows:
• “You do not have to accept this loan because you have received this form
or signed a loan application.”
•
Questions
•
•
A statement directing the borrower to use the contact information disclosed at
the bottom of page 5, if they have any questions regarding their loan
A reference to the CFPB’s website to obtain more information or to submit a
complaint
Contact Information
Contact Information
•
In the Contact Information table, disclose the following information for the
Lender, Mortgage Broker, borrower’s Real Estate Broker, seller’s Real Estate
Broker, and Settlement Agent:
• Name,
• Address,
• NMLS or State License ID, as applicable,
• Contact name (NMLS or State License ID),
• Email, and
• Phone number.
14
Confirm Receipt
Confirm Receipt
•
•
The creditor, at its option, may include a line for the signatures of the borrowers to
confirm receipt. If the creditor includes a signature line, the creditor must also
include a statement that the signature only signifies receipt of the CD.
If the creditor does not include statement line or the consumer’s signature,
add a statement to the Other Disclosures concerning Loan Acceptance that
states: “You do not have to accept this loan because you have received this
form or signed a loan application.”
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