What Is a Closing Disclosure (CD)?
The Closing Disclosure (CD) is the most important financial document a buyer will review before purchasing a home with a mortgage. Mandated by federal law (the TRID rules enforced by the Consumer Financial Protection Bureau), the CD replaced the old HUD-1 Settlement Statement for most residential transactions.
The primary purpose of the CD is transparency. It provides a crystal-clear, final breakdown of the loan terms and all closing costs, ensuring the bank isn't slipping hidden fees or sudden interest rate hikes into the final paperwork.
The 3-Day Rule
Under federal law, the lender or closing agent must provide the buyer with the CD at least three business days before the scheduled closing date. This gives the buyer 72 hours to review the document in a low-pressure environment, ask questions, and compare the final numbers to the initial Loan Estimate they received weeks earlier.
If major changes occur during this 3-day window—such as the loan's annual percentage rate (APR) increasing by more than 1/8th of a percent, or the addition of a balloon payment—the clock resets. A new CD must be issued, and the buyer must wait another three full days before they are legally allowed to close on the house.
What Is Included on the CD?
The five-page document is highly standardized so borrowers can easily read it. Key sections include:
- Loan Terms — The final loan amount, interest rate, and whether there are any prepayment penalties.
- Projected Payments — A breakdown of the exact monthly payment, showing how much goes to principal, interest, and the escrow account (for property taxes and insurance).
- Cash to Close — The final, exact dollar amount the buyer must wire to the closing agent to buy the house.
- Itemized Closing Costs — Every single fee charged by the lender, the title company, the appraiser, and the state government.
Related Terms
- Closing Costs — The fees itemized on page 2 of the CD
- Closing Agent — The professional who collaborates with the lender to finalize the CD numbers
- Mortgage — The loan detailed in the CD
Barnes Walker Title Services
Barnes Walker's closing agents work closely with lenders to ensure the Closing Disclosure is perfectly accurate, balanced, and delivered on time to prevent any delays to your closing day. Submit a title inquiry for assistance.
Florida Law Reference
12 U.S.C. § 2601 et seq. (RESPA); Fla. Stat. § 627.7711
Real estate closings in Florida are governed by federal RESPA requirements and state title insurance regulations. Florida is a "title state" where closings are typically handled by title companies or attorneys.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC