The five-page Closing Disclosure sums up the terms of your loan and what you pay at closing. You can easily compare the numbers to the Loan Estimate you received earlier. There should not be any significant changes other than those you have already agreed to. Take out your own Closing Disclosure, or review the example here. Double-check that you clearly understand what you’ll be expected to pay—over the life of your loan and at closing.

Closing disclosure page 1


Loan terms
Review your monthly payment. Part of it goes to repay what you borrowed (and may build equity in your new home), and part of it goes to pay interest (which doesn’t build equity). Equity is the current market value of your home minus the amount you still owe on your mortgage.

Costs at Closing
Be prepared to bring the full “Cash to Close” amount with you to your closing. This amount includes your down payment and closing costs. The closing costs are itemized on the following pages.

Closing disclosure page 2


Total Loan Costs

Origination charges are fees your lender charges to make your loan. Some closing costs are fees paid to the providers selected by your lender. Some are fees you pay to providers you chose on your own.

Homeowner’s insurance is often paid in advance for the first full year. Also, some taxes and other fees need to be paid in advance.

An escrow or impound account is a special account where monthly insurance and tax payments are held until they are paid out each year. You get a statement showing how much money your lender or mortgage servicer plans to require for your escrow or impound account.

You also get an annual analysis showing what happened to the money in your account. Your lender must follow federal rules to make sure they do not end up with a large surplus or shortage in your escrow or impound account.


Circle one. If you answer no, turn to the page indicated for more information:

  1. The interest rate is what I was expecting based on my Loan Estimate. YES / NO (see page 10)
  2. I know whether I have a prepayment penalty or balloon payment. YES / NO (see page 7)
  3. I know whether or not my payment changes in future years. YES / NO (see page 7)
  4. I see whether I am paying points or receiving points at closing. YES / NO (see page 9)
  5. I know whether I have an escrow account. YES / NO (see above)
Closing disclosure page 3 of 5

Top image: A summary of important financial information appears on page 3 of the Closing Disclosure.

Bottom image: More details of your loan appear on page 4 of your Closing Disclosure.


Calculating Cash to Close

Closing costs are only a part of the total cash you need to bring to closing.

Summaries of Transactions

The section at the bottom of the page sums up how the money flows among you, the lender, and the seller.


Loan Disclosures
Page 4 breaks down what is and is not included in your escrow or impound account. Make sure you understand what is paid from your escrow account and what you are responsible for paying yourself.

Closing disclosure page 5 of 5


Finance Charge
In addition to paying back the amount you are borrowing, you pay a lot of interest over the life of the loan. This is why it is worthwhile to shop carefully for the best loan for your situation.

Annual Percentage Rate (APR)

Your APR is your total cost of credit stated as a rate. Your APR is generally higher than your interest rate, because the APR takes into consideration all the costs of your loan, over the full term of the loan. If anything on the Closing Disclosure is not clear to you, ask your lender or settlement agent, “What does this mean?”


  • Now you’ve spent time understanding what you need to do and what you need to pay, as a new homeowner.
  • Now is the time to step back and feel sure you want to proceed with the loan.


  • If you are not comfortable with your mortgage and your responsibility to make payments, you might not be able to keep your home.
  • If you’ve made a careful decision about what you can afford and the mortgage you wanted, you will be able to balance owning your home and meeting your other financial goals.

Get additional tips, a step-by-step checklist, and help with the rest of the documents you’ll see at closing by contacting CosmoLends at 216.387.1003. CosmoLends are experts in home loan products including FHA, VA, Conventional, USDA and OHFA, as well as purchase rehabilitation loans such as the FHA 203(k) and HomeStyle Renovation products. Call us and speak to one of our mortgage coaches to find out how we can help. You can also speak with a member of our loan team for a FREE consultation.

Published from Your home loan toolkit – A step-by-step guide by Consumer Financial Protection Bureau