What type of document is a closing disclosure?

A closing disclosure is a detailed account of all transaction costs related to a real estate transaction. This document is provided to the buyer and seller before the closing occurs and outlines the final terms of the loan, the costs associated with the purchase, and any fees that will be charged at closing. The purpose of the closing disclosure is to ensure that all parties involved have a clear understanding of the financial aspects of the real estate deal, allowing them to review the transaction costs and ensure there are no surprises on the day of closing.

This detailed nature of the closing disclosure is essential for transparency and helps in confirming that all agreed-upon expenses are accounted for, allowing buyers and sellers to manage their finances effectively throughout the transaction process.