A Closing Disclosure Statement is a vital document in the home buying process that provides transparency and clarity to borrowers about their mortgage loan. This statement is required by law under the Truth in Lending Act (TILL) and the Real Estate Settlement Procedures Act (RESP), ensuring that borrowers have adequate time to review and understand the terms and costs associated with their mortgage. The three-day review period is an essential component of the Closing Disclosure Statement. It allows borrowers to thoroughly examine the details of their loan and compare them with their Loan Estimate, which is provided earlier in the mortgage process. This review period ensures that borrowers are well-informed and have the opportunity to address any discrepancies or raise concerns before the closing of the loan. During the three-day review period, borrowers should carefully assess various elements of the Closing Disclosure Statement, including: 1. Loan Terms: This section outlines the specific details of the loan, such as the loan amount, interest rate, type of loan (e.g., fixed or adjustable-rate), loan term, and payment schedule. 2. Projected Payments: Here, borrowers can find an estimate of their monthly principal and interest payments, along with any additional costs such as property taxes, insurance, and homeowners association fees. It also provides an overview of payment changes over the life of the loan. 3. Closing Costs: This section lists all the fees and charges associated with the loan closing. It includes lender fees, third-party fees (e.g., appraisal, title search, and attorney fees), prepaid expenses (e.g., taxes, insurance), and other costs related to the mortgage transaction. 4. Cash to Close: This indicates the amount the borrower needs to bring to the closing in order to complete the purchase. It includes the down payment, closing costs, and any other adjustments, such as earnest money or seller credits. 5. Loan Disclosures: Here, borrowers will find important information regarding their loan, including any prepayment penalties, late payment fees, and whether the loan is assumable or includes a balloon payment. It's essential to note that there are no specific types of Closing Disclosure Statements with a three-day review. However, there may be variations in format or layout depending on the mortgage lender or loan program. Regardless of these minor differences, the content and information provided must meet the requirements set by TILL and RESP. In conclusion, the Closing Disclosure Statement with a three-day review is a critical document that empowers borrowers with transparency and allows them ample time to review their mortgage loan terms and costs. By thoroughly examining this statement, borrowers can make informed decisions, address any concerns, and confidently proceed with the loan closing process.
Closing Disclosure Statement With A Three Day Review
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How to fill out Closing Disclosure Statement With A Three Day Review?
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FAQ
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. Because of this, the three-day period is NOT measured by hours.
Disclosure of good faith estimate of costs must be made no later than 3 days after application. This means that a creditor must deliver or mail the early disclosures for all mortgage loans subject to RESPA no later than 3 business days (general definition) after the creditor receives a consumer's application.
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.
Your lender must send you a loan estimate within three business days of receiving your loan application. Tip: Because mortgage rates change daily, if you want to make the best comparison among several loan options, you should apply for loan estimates from each lender on the same day.
The requirement for the additional three business-day waiting period once the Closing Disclosure has been delivered applies under three specific scenarios: 1) an inaccurate APR, which violates the established tolerances; 2) the addition of a prepayment penalty; or, 3) a change in the loan product.