Reading your Closing Disclosure: how to spot errors before signing

The Closing Disclosure (CD) is the FINAL accounting of your loan. Federal TRID rules require the lender to deliver it so you receive it at least 3 business days before consummation (the day you sign the Note). The 3-day rule uses the “specific” business day definition under Reg Z — all calendar days except Sundays and federal holidays — which means Saturdays count. That window exists so you can read every line, compare to your most recent Loan Estimate, and catch errors before they get locked into a 30-year commitment.

Delivery rule detail: if the lender mails or emails the CD, it is presumed received 3 business days after sending unless you acknowledge earlier receipt. So practically the lender often issues the CD 6-7 days out to give themselves a buffer.

Most CD errors are honest mistakes — a missed seller credit, a wrong proration, a fee that snuck up. Caught in the 3-day window, they’re fixable in hours. Signed without checking, they’re your problem.

Your job in the 3-day window

Pull up your most recent Loan Estimate (LE) side-by-side with the CD. The CD’s Loan Costs and Other Costs tables literally have a “Loan Estimate” column right next to the “Final” column — the comparison is built into the form. Your job is to verify every line.

For background on the LE, see the Loan Estimate guide.

Page 1: the headline numbers

Same layout as page 1 of the LE. Verify:

• Loan amount — matches what you locked
• Interest rate — matches your rate lock
• Loan term — 30 years, 15 years, etc.
• Loan type — conventional, FHA, VA, USDA
• Loan purpose — purchase, refinance, etc.
• Monthly P&I — matches the rate and amortization
• Prepayment penalty and balloon payment — should be “NO” (unless you specifically have one)
• Projected Payments table — total monthly outflow including escrow

The Cash to Close line is what you actually need to wire. Verify this is the number you’ve planned around.

Page 2: Loan Costs and Other Costs

This is where errors hide. The CD shows the same A-H sections as the LE. For each section, look at the LE column vs the Final column and ask: did this change? Should it have?

Section A: Origination Charges

Should match the LE exactly — zero tolerance. Lender’s own fees (origination, processing, underwriting, discount points) and any fees paid to a lender affiliate cannot increase from LE to CD unless a valid changed circumstance is documented and a revised LE was issued. Legitimate reasons for a change include:

• You changed loan type, term, or down payment
• You changed your discount-point selection (e.g., bought down the rate further)
• A locked rate expired and you re-locked
• You requested a product change

A market rate move between application and lock is not a changed circumstance. If Section A increased and none of the above apply, the lender must cure the difference, typically as a lender credit at closing.

Section B: Services You Cannot Shop For

Zero tolerance. The lender selected these vendors (appraisal, credit report, flood determination, tax service, lender’s title in some states), so the lender owns the risk if pricing moved. If anything in Section B increased without a documented changed circumstance, the lender must cure it.

Section C: Services You Can Shop For

Two paths:

• If you used a provider from the lender’s Written List of Providers: this fee is in the 10% aggregate tolerance bucket with recording fees. The bucket can’t exceed 10% over the LE total.
• If you went off-list (chose your own title company, settlement agent, etc.): no tolerance limit — can change freely based on actual cost. The trade-off for shopping is that you bear the variance.

This is usually where buyers see legitimate changes. As long as you’re comfortable with the change, it’s fine.

Section E: Taxes and Other Government Fees

Recording fees are in the 10% aggregate bucket with shoppable services from the lender’s list — small variance is fine, but the combined bucket can’t exceed 10%.

Transfer taxes are zero tolerance — they’re fixed by formula on the purchase price (or loan amount, depending on jurisdiction). If transfer taxes moved between LE and CD without the price changing, it’s either a math error or the lender mis-coded the formula. Either way, the lender owes you the cure.

Section F: Prepaids

Will likely change — these depend on your actual closing date and your final insurance choice.

• Prepaid interest: per-day rate × days from closing to end of month. If you closed earlier or later than the LE assumed, this shifts.
• Homeowners insurance premium: changes if you switched insurers or coverage levels
• Property taxes (if any prepaid at close): shifts based on county tax cycle and closing date

Section G: Initial Escrow Payment

The lender’s cushion in your escrow account. Will often shift slightly from the LE based on closing date and current tax/insurance amounts. Verify the per-month amounts (taxes, insurance, MI) match what you expect to pay ongoing.

Section H: Other

• Owner’s title insurance — no tolerance limit because you can shop for it. Verify the policy amount equals the full purchase price (not the loan amount — common error) and that you weren’t accidentally opted out if you wanted the policy. In states where the seller customarily pays, this may show as a seller-paid line in section L.
• Home warranty, broker compensation — verify if applicable

For background on what each fee is, see the closing costs guide.

Page 3: Calculating Cash to Close + Summaries of Transactions

Two tables here. Both matter.

Calculating Cash to Close

The math: closing costs + down payment - deposit (earnest money) - loan amount - other credits = Cash to Close.

Verify this matches what you plan to wire. If it doesn’t, walk each line backward to find the discrepancy.

Summaries of Transactions (the K/L/M/N tables)

Two side-by-side tables: Borrower’s Transaction (K and L) and Seller’s Transaction (M and N). Buyers should focus on K and L. (If the lender is using the alternate “purchase only” form — common on cash-out refis — the seller side is omitted.)

• K. Due from Borrower at Closing: contract sale price + closing costs you owe + adjustments for items the seller paid in advance (prepaid HOA, taxes in tax-paid-in-advance jurisdictions)
• L. Paid Already by or on Behalf of Borrower at Closing: earnest money deposit, loan amount, seller credits (negotiated in offer or after inspection), lender credits, tax prorations in paid-in-arrears jurisdictions

Cash to Close from the borrower = K minus L.

This is where to verify your earnest money credit and any seller-paid concessions actually appear. Missing seller credits is one of the most common CD errors I see. If you negotiated $5,000 in seller credits and don’t see them on the L side, call before signing — the credit gets eaten by the title company’s ledger if no one catches it.

Page 4: Loan Disclosures

Standard regulatory disclosures. Skim but verify:

• Assumption: usually “will not allow” for conventional, “may, subject to conditions” for VA/FHA/USDA. See the assumable mortgage calc.
• Demand feature: should be “does not have”
• Late payment: typical 4-5% of overdue P&I after 15-day grace
• Negative amortization: should be “does not have” for standard loans
• Partial payments: how the servicer handles short payments
• Security interest: confirms which property secures the loan
• Escrow account: monthly escrow portion, what they collect for — matches Section G plus your ongoing monthly cushion. See escrow accounts guide.

Page 5: Loan Calculations and Contact Info

The final summary numbers, mostly the same as page 3 of your LE:

• Total of Payments — everything you’ll pay over the loan’s life
• Finance Charge — total interest + most fees
• Amount Financed — loan amount minus prepaid finance charges
• Annual Percentage Rate (APR)
• Total Interest Percentage (TIP)

Plus contact info for the lender, mortgage broker, real estate brokers, and settlement agent. Save this page — you’ll need it for tax season and any post-close issues.

The 3-business-day rule

You must receive the CD at least 3 business days before consummation (the day you sign the Note). Under the TRID 3-day rule, “business days” includes Saturdays and excludes only Sundays and federal holidays. If the CD is mailed or emailed, regulation presumes you received it 3 business days after sending — unless you sign a written acknowledgment of earlier receipt.

Changes that DO NOT restart the clock

Most corrections don’t reset the 3 days. The lender issues a revised CD that just needs to be in your hands at or before consummation:

• Typo fixes
• Updated proration math (taxes, insurance, HOA)
• Updated escrow deposit
• Most fee adjustments within tolerance
• Seller-side corrections that don’t affect your terms

Changes that DO restart the clock

Only three changes trigger a new 3-business-day waiting period under 12 CFR 1026.19(f)(2)(ii):

1. APR becomes inaccurate — meaning APR increases more than 0.125% (1/8 of a percent) on most fixed-rate loans, or more than 0.25% (1/4 of a percent) on irregular loans (ARMs and anything with non-uniform payments). Note: an APR DECREASE does NOT trigger a new waiting period under current rules.
2. Loan product change — switching from fixed to ARM, from conventional to FHA, interest-only to fully amortizing, etc.
3. Prepayment penalty added to the loan

If any of these hit, closing slips by at least 3 business days from re-delivery. Plan accordingly — movers, sellers, and lockboxes all need to adjust.

What to do if numbers are wrong

1. Call your loan officer immediately. Most CD errors are correctable in hours.
2. Document what you found — save screenshots, the CD PDF, the LE you’re comparing to
3. Get a corrected CD in writing — not a verbal promise
4. Verify the corrected CD before signing — recheck every line you raised plus the line items that changed in the correction

Better to delay close by a few days than sign a CD with errors baked in.

Specific items to verify (checklist)

• Loan amount matches lock
• Interest rate matches lock
• Loan term and type match what you applied for
• Monthly P&I matches your calculator’s number
• Section A matches LE
• Section B matches LE
• All seller credits negotiated in offer appear in section L
• All seller credits from inspection negotiation appear
• Earnest money deposit credit appears
• Property tax proration is correct (debit in advance-states, credit in arrears-states)
• HOA proration is correct (if applicable)
• Cash-to-close matches what you plan to wire
• Escrow per-month amounts match expected ongoing costs
• Loan assumability is what you expected
• PMI/MIP shown if applicable, in the right amount — see the PMI calculator

Wire fraud reminder

Once you’ve verified the CD and know the cash-to-close amount, you’ll wire that money. Verify wire instructions BY PHONE using a number you looked up independently — not from any email. Real estate is the #1 target for business email compromise per the FBI’s IC3 reports, with billions stolen annually. The pattern: criminals compromise the title company or agent’s email, monitor the thread for weeks, then send spoofed instructions in the final 48 hours before closing. Once wired, the money is typically pulled to a foreign account or crypto within hours.

Recovery window is 24-72 hours via the FBI’s Financial Fraud Kill Chain (call IC3 and your originating bank immediately). Past that window, recovery odds drop to near zero.

If wire instructions ever change mid-deal, treat that as a fraud attempt until verified by phone with a known number.

Common Closing Disclosure mistakes

• Skimming. Most buyers spend 10 minutes on a document that locks in 30 years. Spend an hour.
• Not comparing to the LE. That’s the whole point of the 3-day window. The CD is structured for line-by-line comparison.
• Trusting verbal promises. “We’ll fix it at the table” is not enforceable. Get a corrected CD in writing.
• Missing absent seller credits. If you negotiated credits and they aren’t in section L, you’re leaving money on the table.
• Signing wire instructions sent by email. The single most expensive mistake in residential real estate.
• Not noticing increased lender fees. Section A is zero-tolerance — if it went up without a loan change, you’re owed a refund.

Tools you’ll use

• Closing Cost Estimator — sanity-check the CD totals
• Mortgage Calculator — verify monthly P&I and full payment
• PMI Removal — if MI/MIP shows on your CD
• Seller Net — the seller-side equivalent
• Assumable — if your loan is assumable

For the form that comes earlier in the process, see the Loan Estimate guide. For what happens after you sign, see the closing day guide.