Closing disclosure days refer to the specific timeframes within which lenders are legally obligated to provide borrowers with a detailed closing disclosure document. This document outlines all the final details of a mortgage loan, including the loan terms, interest rate, closing costs, and any additional fees associated with the purchase or refinancing of a property. The Real Estate Settlement Procedures Act (RESP) mandates that lenders must provide borrowers with the closing disclosure at least three business days before the scheduled loan closing. This allows borrowers ample time to thoroughly review the document and understand the financial implications of their mortgage commitment. Different types of closing disclosure days include: 1. Initial Closing Disclosure Day: This refers to the first time a borrower receives the closing disclosure from the lender. It typically occurs shortly after the loan has been approved and all necessary paperwork has been submitted. This initial disclosure allows borrowers to confirm that the loan terms align with their expectations before moving forward with the closing process. 2. Revised Closing Disclosure Day: Sometimes, changes may arise in the loan terms or closing costs after the initial disclosure has been provided. In such cases, lenders are required to issue a revised closing disclosure to borrowers, reflecting any modifications. This revised disclosure must be provided at least three business days prior to the scheduled closing, giving borrowers an opportunity to review the updated terms and costs. 3. Final Closing Disclosure Day: This signifies the last opportunity for borrowers to receive an accurate closing disclosure before the loan closing. The final disclosure ensures that any changes made to the loan terms or costs have been updated and accurately reflected. It serves as a final review document for borrowers to verify that the loan conditions meet their expectations before proceeding with the closing. By adhering to these closing disclosure days, lenders ensure transparency and promote informed decision-making for borrowers. It allows borrowers to fully understand their financial commitment, assess any changes, and clarify any concerns or discrepancies before finalizing the loan closing. Compliance with these regulations safeguards borrowers from any unexpected surprises related to their mortgage loan.
Closing Disclosure Days
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The three-day period is measured by days, not hours. Thus, disclosures must be delivered three days before closing, and not 72 hours prior to closing. Note: If a federal holiday falls in the three-day period, add a day for disclosure delivery.
For Closing Disclosures, a business day is defined as all calendar days except Sundays and Federal public holidays, such as Labor Day. The Closing Disclosure must be provided to you at least 3 business days PRIOR to loan consummation.
A consumer may modify or waive the right to the three-day waiting period only after receiving the disclosures required by § 1026.32 and only if the circumstances meet the criteria for establishing a bona fide personal financial emergency under § 1026.23(e).
If you are closing on Friday, the lender must have the closing disclosure to you by the preceding Tuesday. This gives you three consecutive days to review the document before closing. However, If you are closing on Tuesday, you are to receive it on the preceding Friday.
When your three business-day waiting period starts is determined by your consummation day. This three business-day rule may include Saturdays, but it does not count Sundays or holidays. For instance, if you want to sign on a Friday and a holiday falls on a Thursday, you must receive your closing disclosure on Monday.