What does the Closing Disclosure inform the borrower about?

The Closing Disclosure is a critical document in the home buying process that provides the borrower with detailed information about all the costs associated with the loan and the real estate transaction. This includes a breakdown of the loan amount, interest rates, monthly payments, and other financial aspects such as closing costs, escrow fees, and any other charges related to the transaction.

This document is designed to ensure that borrowers fully understand their financial obligations before finalizing the loan, thus promoting transparency and preventing surprises at closing. Unlike statements that might provide generalized interest rate comparisons or historical property ownership data, the Closing Disclosure offers a complete and itemized summary, making it clear what the borrower is agreeing to in terms of both immediate costs and long-term commitments related to the loan.