What is the Closing Disclosure (CD)?
The Closing Disclosure, or CD, outlines the details of a borrower’s home loan transaction. Prior to the implementation of the TILA/RESPA Integrated Disclosure (TRID) regulations in 2015, this information was found in the HUD-1 Settlement Statement and the final Truth-in-Lending disclosure. With TRID, these two forms are now combined into one form, the Closing Disclosure.
The intent of TRID is to make documents like the CD easier for borrowers to understand the details of their loan. The lender (Academy Mortgage) prepares and delivers the CD to the borrower, who must have at least three business days to review the CD, from the date of the borrower’s receipt of the CD to the date of the loan settlement (closing).
The Closing Disclosure is a five-page form:
- Page 1 lists the loan terms, projected payments, and costs at closing.
- Page 2 lists the closing costs in detail and identifies who is paying for
- the charges.
- Page 3 calculates the cost to close and provides a summary of the transaction.
- Page 4 discloses loan features, such as assumption, late payment, and escrow account information, and, if applicable, describes terms pertaining to adjustable-rate mortgages (ARMs).
- Page 5 includes loan calculations, other disclosures, and contact information for the lender, real estate professionals, and settlement agent.