Texas Real Estate Sales Agent ExamFinancingHard
A buyer is closing on a new home. The lender provides a document detailing all costs associated with the mortgage transaction, which must be provided to the borrower at least three business days before closing. What is this crucial disclosure document called?
- AGood Faith Estimate (GFE)
- BTruth in Lending Disclosure (TIL)
- CClosing Disclosure (CD)
- DLoan Estimate (LE)
Show answer & explanationAnswer & explanation
Correct answer: C. Closing Disclosure (CD)
The Closing Disclosure (CD) is the crucial document that details all final costs associated with the mortgage transaction. It must be provided to the borrower at least three business days before the scheduled closing, as mandated by TRID (TILA-RESPA Integrated Disclosure) rules.
Why the other options are wrong
- A. The GFE was replaced by the Loan Estimate under TRID for most transactions.
- B. The TIL disclosure was also replaced by the Loan Estimate and Closing Disclosure under TRID.
- D. The Loan Estimate is provided earlier in the process (within 3 business days of application) and gives estimated costs, not the final costs.
Closing Disclosure (CD)
The Closing Disclosure (CD) is a five-page form that provides final details about the mortgage loan selected and must be received by the borrower at least three business days before closing.
- Mandated by TRID rules
- Details all final loan and closing costs
- Compares final costs to Loan Estimate
Memory trick: LEads to CD: Loan Estimate earlier, Closing Disclosure final.