What is the closing disclosure?

The closing disclosure is a key document involved in the real estate transaction process, particularly for mortgage loans. It outlines the final terms and costs associated with the mortgage loan, providing a comprehensive overview of what the borrower will be responsible for at closing. This includes details such as the loan amount, interest rate, monthly payments, and all fees and costs associated with the loan, including closing costs and any other financial obligations.

The importance of this document lies in its role in ensuring transparency for the borrower. It allows buyers to review and understand their financial commitments before finalizing the transaction. The closing disclosure must be provided to the borrower at least three days before closing, giving them time to review it and address any questions or concerns.

In contrast, the other options do not accurately represent what a closing disclosure is meant to convey. A document summarizing the buyer's financial history would pertain to the buyer's creditworthiness and ability to secure a loan, but it is not the focus of the closing disclosure. A report on neighborhood crime statistics relates to the safety and attractiveness of the area where the property is located and has no direct connection to the financial aspects of the mortgage. Lastly, a summary of the real estate agent's commission pertains to the payment structure of the agent