What document provides details on the closing costs to a buyer?

The Closing Disclosure is the document that offers a comprehensive breakdown of the closing costs to a buyer. It is required under the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA) to ensure that buyers receive clear and transparent information about all fees associated with the closing of their mortgage loan.

This document includes details like loan terms, projected monthly payments, and costs related to the transaction, including taxes, insurance, and closing fees. It must be delivered to the borrower at least three business days before the closing occurs, providing time for the buyer to review the terms carefully.

While the Good Faith Estimate (GFE) was historically used to provide a good faith estimate of closing costs, it has been replaced by the Loan Estimate and Closing Disclosure as part of the TILA-RESPA Integrated Disclosure rule. The Loan Estimate provides an initial estimate of closing costs within three days of the loan application, but it is the Closing Disclosure that provides the final, detailed accounting of all associated costs prior to closing. The Title Report outlines the ownership history and any liens against the property but does not detail closing costs.

Thus, the Closing Disclosure is the critical document that serves to inform buyers about their closing costs in a clear and structured manner.