Signing the Closing Disclosure
When it comes to securing a mortgage, Closing Disclosures (CDs) are one of the most critical parts of the process. They’re not just another form to sign—they’re the final word on your loan’s terms, costs, and monthly payments.
Whether you’re buying a home in Texas or refinancing, here’s everything you need to know about understanding and signing your Closing Disclosure. The lender creates the initial CD after the initial underwriting approval.
The first page of the Closing Disclosure contains the loan’s terms and provides a breakdown of the monthly mortgage payment. The subsequent pages itemize the closing cost.
What Is a Closing Disclosure?
The Closing Disclosure, or CD, is the document that gives you a complete breakdown of your mortgage. It includes your loan terms, monthly payment details, and itemized closing costs.
You’ll see two Closing Disclosures during your mortgage journey:
1. Initial Closing Disclosure (Initial CD): Sets the stage with estimated figures.
The Initial CD is the most time-sensitive document throughout the mortgage loan process because it requires e-signatures a minimum of three days before closing. The initial closing disclosure is not perfect; however, it’s mandatory that it be acknowledged via e-signatures.
2. Final Closing Disclosure (Final CD): The final, exact costs and terms reviewed and signed at closing. The Final CD is what will be signed at closing and outlines the exact fees of the loan. The Final Closing Disclosure is typically prepared a day or two before closing by the title company.
It’s worth noting that the Closing Disclosure’s predecessor is the Loan Estimate (LE). The LE document is sent in the beginning stages of the mortgage loan process during the loan packaging & lenders disclosures stage. The LE and CD similar; therefore, everything should look familiar when the closing disclosure is issued.
See our closing day overview for what to expect the day of closing.
The Initial Closing Disclosure: Your Permission Slip
The Initial CD is the first version of this critical document, and it’s one of the most time-sensitive parts of the process. Federal law requires you to sign it at least three business days before closing.
Think of the Initial CD as a “permission slip.” It’s not the final word on your loan’s numbers, but by signing it, you start the clock for the federally mandated three-day waiting period before closing. Without it, your loan process can’t move forward.
The Mortgage Mark Team is still the point of contact for any questions, not the Disclosure Team. The Initial Closing Disclosure email will resemble the Loan Estimate (LE) disclosure that was provided at the beginning of the mortgage process.
To access the Initial CD, use the same login and password that was created for the initial loan package. This is typically the last four digits of your social security number.
Why the Initial CD Matters
- Starts the Three-Day Waiting Period: Signing this document kicks off the required waiting time before closing.
- Opens the Door for Adjustments: It allows time for you, your lender, and the title company to review and finalize the exact figures for the Final CD.
Federal law mandates the Initial Closing Disclosure be signed three business days before closing. A delay in signing the Initial CD will result in a delayed closing.
Understanding the Three-Day Rule
Federal regulations require that you sign the Initial CD a minimum of three business days before closing. Here’s how the timeline works:
Example 1: Closing on Thursday? The Initial CD must be signed by Monday at midnight. (Monday, Tuesday, and Wednesday are your three business days.)
Example 2: Closing on Tuesday? You need to sign by Friday at midnight because Sundays and federal holidays don’t count.
If you don’t sign the Initial CD on time, your closing will be delayed—no exceptions.
Initial CD is an Estimate… not exact figures
The CD Disclosure Team is part of the compliance department (yuck!) and their main priority is to send the CD to start that three-day clock.
Please sign the Initial CD immediately upon receipt and don’t panic if it’s not perfect. The vast majority of the time the Initial CD won’t be completely accurate.
Think of the Initial Closing Disclosure like a permission slip. By e-signing the it you are starting the mandatory clock and allowing us collaborate with the title company to prepare the Final CD.
Final Closing Disclosure
Once the Final CD is ready,
- The title company sends us the Final CD a day or two before closing
- Email you the document
- Call to review it with you in detail, ensuring you’re comfortable with the final numbers
This step ensures transparency and confidence before you sign at closing. The Final Closing Disclosure (CD) will provide the final and exact costs.
We then email you the Final CD and call to review it in detail. Be sure to check out what you need to know before going into closing on the final underwriting approval is issued.
The Relationship Between the Loan Estimate (LE) and the CD
The Loan Estimate (LE), which you receive early in the loan process, is the predecessor to the CD. The LE outlines your loan’s estimated costs, so the Closing Disclosure shouldn’t feel unfamiliar. Think of the LE as the “rough draft” and the CDs as the polished versions.
Texas Closing Disclosure: Specific Considerations
Buying a home in Texas? There are unique aspects of Texas mortgages to consider:
- Property Taxes: Texas has some of the highest property taxes in the country, which can significantly impact your monthly payments and closing costs.
- Title Companies: In Texas, title companies play a major role in preparing the Final CD, ensuring that local regulations are followed.
Key Takeaways for Closing Disclosures
- Sign the Initial CD Immediately: It starts the clock and ensures your loan process stays on track.
- Understand the Timeline: Sundays and federal holidays don’t count toward the three-day waiting period.
- Review the Final CD Carefully: It’s your chance to confirm all details before closing.
Simplify Your Closing Disclosure Process
From the Initial CD to the Final CD, understanding these documents is key to a stress-free closing. Whether you’re buying in Dallas, Texas, or beyond, we’re here to guide you every step of the way. Have questions? Contact the Mortgage Mark Team today!
Previous: initial underwriting approval
Mark Pfeiffer
Branch Manager
Loan Officer, NMLS # 729612
972.829.8639
MortgageMark@MortgageMark.com
Mortgage Loan Process Outline
Click here for an overview on each step.
- Loan Packaging & Lender’s Disclosures (1-2 days)
- Loan Setup (2-3 days)
- Processing / Credit Approval (2-3 days)
- Initial Underwriting Approval (2-3 days)
- Sign the Initial Closing Disclosure (CD) (Immediate) <– YOU ARE HERE
- Final Underwriting Approval (1-2 days)
- Docs to Title / Final CD Issued (1-2 days)
- Closing & Funding (TBD)
- After Closing