Closing Disclosures: What You Need to Know
If you're purchasing a home or other residential property, U.S. government regulations under the Dodd-Frank Act's TILA-RESPA rules mandate that you be provided a form called a closing disclosure, which you'll have to sign in order to close the deal. According to federal law, you have the right to see your closing disclosure at least 3 business days before closing.
What is typically covered on a closing disclosure form?
A closing disclosure form usually covers expenses including:
- Outstanding mortgages to be paid
- Amount of new loan
- Loan origination fees
- Property appraisal costs
- Title insurance costs
- Tax preparation fees
- Credit report fees
- Courier fees
- Document/recording fees
- Real estate agent fees
- Settlement/closing fees
- Closing protection fees
Do closing disclosure forms apply to commercial property?
In most cases, closing disclosure forms are not required for commercial closings. However, there may be some exceptions; if a commercial property is being used for a family or non-commercial, "consumer" purpose, it may be held to TILA rules, which usually would mandate a closing disclosure.
Make sure to read your closing disclosure as early as possible
Reading your closing disclosure is a great way to make sure that all of the costs of your loan are in order-- and that there aren't any unexpected surprises lurking. If possible, see if you can get your closing disclosure more than 3 days before closing in order to review it thoroughly-- and always have someone else, such as a trusted friend, family member, or attorney look it over with you to make sure there are no inconsistencies.