What financial disclosure must be provided prior to closing a mortgage transaction?

The Closing Disclosure is a critical financial document that must be provided to borrowers prior to closing a mortgage transaction. This document outlines the final details of the mortgage loan, including the loan terms, projected monthly payments, and a breakdown of closing costs. It is designed to give borrowers a clear understanding of what they will be paying and helps ensure that there are no surprises at the closing table.

The requirement for the Closing Disclosure stems from the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA), which mandate that borrowers receive this disclosure at least three business days before consummating the loan. This timeframe gives borrowers the opportunity to review the information and ask any questions they may have.

Other options, while related to mortgage transactions, serve different purposes and are not the final disclosure required just before closing. For instance, the Loan Estimate is provided earlier in the process to give borrowers a good faith estimate of the loan terms and costs, while the Good Faith Estimate was a prior standard that has largely been replaced by the Loan Estimate. The Borrower's Agreement typically refers to the terms agreed upon by the borrower, but it is not a specific financial disclosure like the Closing Disclosure.