What is the purpose of the Closing Disclosure?

The Closing Disclosure is a crucial document in the mortgage process, specifically designed to provide borrowers with comprehensive information about the final terms and costs associated with their mortgage loan. This document serves to ensure that borrowers understand the financial obligations they are committing to at closing, including details about loan amounts, interest rates, monthly payments, and other fees.

By outlining the exact costs associated with the loan, the Closing Disclosure helps borrowers make informed decisions and prevents any surprises at the closing table. The emphasis on clarity and transparency in this document is key, as it aligns with federal regulations aimed at protecting consumers during the mortgage process.

While other options touch on aspects of the mortgage process, they do not align with the primary purpose of the Closing Disclosure, which focuses specifically on final loan terms and costs, reinforcing the importance of clear communication regarding financial commitments before finalizing the mortgage agreement.