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Blog Series: Understanding the Loan Process Part 7: Closing Disclosures

Blog Series: Understanding the Loan Process Part 7: Closing Disclosures

Welcome back to our blog series, "Understanding the Loan Process." In this installment, we will explore an essential step in the loan process: the closing disclosures. Whether you're a first-time homebuyer or refinancing your current mortgage, understanding your closing disclosure is crucial for a smooth closing experience.

A Closing Disclosure (CD) is a five-page document provided by your lender that outlines the final terms and costs of your mortgage. You will receive this document at least four business days before signing your loan documents. This period allows you to review the details and ensure everything is accurate before finalizing your loan.

It's vital to review your Closing Disclosure carefully. Here are a few tips to help you through the process:

1. Compare with Your Loan Estimate: Ensure the final terms and costs match what was outlined in your initial Loan Estimate. Significant discrepancies should be discussed with your lender immediately.
2. Check for Errors: Verify all personal information, loan details, and costs for accuracy.
3. Ask Questions: If anything is unclear or seems incorrect, don't hesitate to contact your lender or closing agent for clarification.

Why the Four-Day Rule is Important?
The four-day review period before signing loan documents is designed to protect you, the borrower. It ensures you have ample time to address any discrepancies or concerns without feeling rushed. During this period, you can gather necessary documents, ask questions, and make sure all details are correct and clear. This preparation helps ensure you're fully ready for your closing day, avoiding any last-minute surprises or issues.  
It's important to note that when you sign loan documents, that is not the same day you close. The closing process involves additional steps, and having this review period ensures that you are fully aware of all terms and conditions before proceeding.

Stay tuned for the next part of our series, where we will cover what to expect on your closing day, including details on loan document signing with notary and funding process.

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