Updated: Nov 4
A Closing Disclosure, often referred to as the "CD," is a critical document provided to the homebuyer during the final stages of a real estate transaction, typically three business days before the actual closing date. This document is a standardized form created by the Consumer Financial Protection Bureau (CFPB) to ensure transparency in real estate transactions.
The Closing Disclosure outlines all the financial details associated with the home purchase, including the terms of the loan and the final settlement costs.
Significance to Homebuyer: For a homebuyer in Indiana, the Closing Disclosure is a vital document that provides a comprehensive overview of the financial aspects of the real estate transaction. It includes essential information such as: Loan Terms: The CD details the loan amount, interest rate, and monthly payments, allowing the homebuyer to confirm that these terms align with what they agreed to during the mortgage application process.
Closing Costs: It lists all the fees and costs associated with the purchase, including lender fees, title insurance, and government recording charges. This helps the homebuyer understand the financial obligations they'll need to meet at closing.
Cash to Close: The Closing Disclosure provides a clear breakdown of how much cash the homebuyer needs to bring to the closing table. It takes into account the down payment, earnest money, and any credits.
Loan Estimate Comparison: The CD includes a section that compares the final terms with the original Loan Estimate provided earlier in the process, helping the homebuyer identify any discrepancies.
Contact Information: The document includes contact information for the lender, real estate agents, and other parties involved, making it easier for the homebuyer to reach out with any questions or concerns.
What the Notary Closing Agent Must Know:
As a notary closing agent, it's crucial to understand the Closing Disclosure thoroughly.
Here's what you need to know:
Review: Carefully review the CD to ensure it is complete and accurate. This includes verifying that the loan terms and financial details match the loan documents and other agreements.
Explanation: Be prepared to explain the document to the homebuyer in simple terms. They should understand the financial implications and their obligations.
Timing: Ensure that the CD is delivered to the homebuyer at least three business days before the closing date. Delays could result in rescheduling the closing.
Compliance: Comply with Indiana state laws and regulations regarding the execution of notary services during the closing process.
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