What is a Closing Disclosure (CD)
What is a Closing Disclosure (CD)?
The Closing Disclosure (a.k.a. "the CD") is the mortgage document that outlines all the details of the financing. The lender creates the initial CD after the initial underwriting approval.
The first page of the Closing Disclosure contains the loan’s terms and provides a breakdown of the monthly mortgage payment. The subsequent pages itemize the closing cost.
Initial CD: Very Important
Once we submit your loan for final approval my team will send a request to the lender to create the initial Closing Disclosure (CD). All parties on the loan (and in some cases even spouses that aren’t on the loan) must e-sign the Initial CD to close on time.
Federal law mandates the Initial Closing Disclosure be signed three business days before closing. A delay in signing the Initial CD will result in a delayed closing.
Example 1: A loan closing on a Thursday must have the Initial Closing Disclosure e-signed before midnight on Monday to satisfy the three-day waiting period. (Monday, Tuesday, and Wednesday)
Example 2: It’s important to note that Sundays and federal holidays do not count as "waiting days". Therefore, a loan closing on a Tuesday requires the Initial CD be e-signed by Friday to satisfy the three-day waiting period. (Friday, Saturday, and Monday)
Initial CD is an Estimate… not exact figures
The lenders CD Disclosure Team is part of the compliance department, and their main priority is to send the CD to start that three-day clock.
Please sign the Initial CD immediately upon receipt and don't panic if it's not perfect. Much of the time the Initial CD won't be completely accurate.
Think of the Initial Closing Disclosure like a permission slip. By e-signing it, you are starting the mandatory clock and allowing us to collaborate with the title company to prepare the Final CD.
The Final Closing Disclosure (CD) will provide the final and exact costs at closing.