What is the significance of a closing disclosure in real estate transactions?

The closing disclosure plays a crucial role in real estate transactions as it outlines all final transaction costs, including fees and loan terms. This document is provided to the buyer and seller at least three days before closing, allowing them to review the financial details of the deal. It ensures transparency by breaking down all costs associated with the purchase, such as lender fees, title insurance, and property taxes, and presents the final terms of the mortgage, including interest rates and payment schedules.

By providing an itemized list, the closing disclosure allows both parties to verify that there are no unexpected charges and that all agreed-upon terms are accurately reflected. This document is essential for helping buyers understand their financial obligations and ensures that they are fully informed before they commit to the transaction.