A Closing Disclosure is the five-page federal form that shows your final FHA loan terms and every cost at closing, and you must receive it at least three business days before you sign. Most borrowers skim it, and that is a mistake: it is the last document where an error can be fixed before money moves. This closing disclosure explained page by page covers what each section says, which numbers to check against your Loan Estimate, and what to do if something looks wrong.
The Three-Business-Day Rule and Who Sends the Form
Under the CFPB’s TILA-RESPA Integrated Disclosure rule, you must receive the Closing Disclosure at least three business days before consummation, which is the moment you become legally obligated on the loan. For this rule, “business days” generally means every calendar day except Sundays and federal holidays, so Saturdays count. Confirm the current counting rules on consumerfinance.gov, because they are the authority here, not a rule of thumb.
The lender prepares and delivers the form. Duane Buziak, working as a mortgage broker, coordinates between the lender and the title company so the figures are settled early and you have real time to read. Ask for the delivery date in writing, since mailed copies are treated as received on a later day than emailed copies.
Three changes that restart the clock
Most corrections do not delay closing. A new three-day wait is required only if:
- the APR rises beyond the allowed tolerance,
- the loan product changes, for example from a fixed to an adjustable rate, or
- a prepayment penalty is added.
Confirm the current thresholds against CFPB guidance. Other fixes, such as a corrected spelling or a revised credit, can usually be made without moving the date.
An example timeline
Suppose your closing is set for Friday. Counting Saturday as a business day, you would need the form no later than the Monday before. Do not rely on that arithmetic alone. Ask for the exact date and time the form was sent, and make sure it landed in an inbox you actually check.
Page 1: Loan Terms, Projected Payments, and Cash to Close
Page 1 is the summary, and it is the page to compare against your Loan Estimate first. The Loan Terms box lists the loan amount, interest rate, and monthly principal and interest. Beside each, the form states whether it can change after closing. On a fixed-rate FHA loan, all three should read “No.”
The Projected Payments table breaks your monthly payment into principal and interest, mortgage insurance, and estimated escrow. On an FHA loan, the mortgage insurance line is the annual MIP, collected monthly. The annual MIP rate depends on your loan amount, term, and loan-to-value tier, so check the line against the figure on your Loan Estimate rather than a general rule of thumb. Confirm current rates on hud.gov.
The Costs at Closing box shows total closing costs and, most important, cash to close. Several things flow into that number:
- Your down payment. FHA’s minimum is 3.5% for borrowers with a credit score of 580 or higher, per HUD Handbook 4000.1.
- Your earnest money deposit, which is credited toward what you owe.
- Seller credits, which reduce the cash you bring.
- Lender credits, if any, which offset costs.
Lay the Loan Estimate and Closing Disclosure side by side. The two forms use matching layouts on purpose, so page 1 of one should line up with page 1 of the other. A rate that moved, a loan amount that grew without explanation, or a cash-to-close figure far above the estimate deserves a question before you do anything else.
Page 2: Closing Cost Details and the FHA-Specific Line Items
Page 2 itemizes every charge, grouped by who provides the service and how much the fee is allowed to move from your Loan Estimate. Under CFPB tolerance rules, the groups behave differently:
- Section A, Origination Charges: the lender’s and broker’s fees, and any discount points. These generally cannot increase from the Loan Estimate unless you requested a change or a valid changed circumstance occurred.
- Section B, Services You Cannot Shop For: items such as the appraisal and credit report. These also generally cannot rise.
- Section C, Services You Can Shop For: title and settlement services. If you chose providers from the lender’s list, these may rise up to 10% in total. If you picked your own, they are not held to that limit.
Where the upfront MIP appears
The upfront mortgage insurance premium (UFMIP) is 1.75% of the base loan amount, per HUD Mortgagee Letter 2015-01. Verify it is still current on hud.gov before you rely on it. Most FHA borrowers finance it into the loan rather than paying cash, so it raises the balance and does not appear as cash due.
For illustration only, suppose your base loan is $300,000. The UFMIP is $5,250 (1.75% of $300,000), and the financed total loan amount becomes $305,250. Your interest accrues on that larger figure, which is why the loan amount on page 1 can exceed the base amount you expected.
Taxes, prepaids, and escrow setup
Section E covers recording fees and transfer taxes. Sections F and G are where first-time buyers are most often surprised. F lists prepaids: typically a year of homeowners insurance paid up front, plus prepaid interest from closing to the end of the month. G lists the initial escrow reserves for insurance and property taxes, which fund the account your servicer pays bills from. These can run to thousands of dollars, so check each against the quotes you gathered.
Pages 3 and 4: Cash to Close Math, Payoffs, and the Loan Disclosures
Page 3 opens with the Calculating Cash to Close table. It sets the Loan Estimate figure next to the final figure for each line, then marks whether it changed. Read the “Did this change?” column closely. Every “Yes” should have an explanation you can repeat back, such as a lower seller credit or a different payoff amount.
Below it, the Summaries of Transactions show the full flow of money between you and the seller. Look for the earnest money deposit, any seller credit, and prorated property taxes. A short example: if you owe $12,000 in cash and the seller agreed to a $4,000 concession, your cash to close falls to $8,000, provided the credit is within FHA’s limits. If the contract promised a credit and it is missing here, raise it immediately.
Page 4: the loan disclosures
Page 4 lists terms that govern the loan after closing:
- Assumption: FHA loans are generally assumable under HUD rules, with the buyer needing to qualify. Confirm current conditions in HUD Handbook 4000.1.
- Demand feature: whether the lender can call the loan due. Standard FHA loans should say no.
- Late payment: the grace period and the fee charged afterward.
- Negative amortization: whether your balance can grow. It should not.
- Escrow account: the monthly escrow amount and what it covers.
On the escrow item, FHA generally requires an escrow account for taxes and insurance, so waiving it is not the option it can be on some other loans. Check HUD Handbook 4000.1 for the current requirement.
Page 5 and the Red-Flag Checklist: What to Compare Before You Sign
Page 5 summarizes the cost of credit. The APR folds in interest and certain fees, so it runs higher than your note rate. Total Interest Percentage shows total interest over the loan as a share of the loan amount, and Total of Payments shows everything you will have paid by the end of the term. The page also lists contact details for the lender, broker, and settlement agent. Save them, and use only these numbers when you verify anything.
Numbers to match against your Loan Estimate
- Interest rate, and whether you locked it.
- Loan amount, including the financed UFMIP.
- Monthly mortgage insurance on the Projected Payments table.
- Lender credits, which should not shrink without a reason.
- Zero-tolerance fees, meaning lender and broker charges and transfer taxes, which cannot increase without a valid changed circumstance.
Common errors to hunt for
- Misspelled names or a wrong property address.
- A seller credit that was agreed but not shown.
- An escrow amount that does not match your insurance and tax quotes.
- Discount points you did not choose.
If you find an error, ask for a corrected form and request it in writing so there is a record. A revised Closing Disclosure restarts the three-day wait only in the three triggering cases covered earlier. Otherwise, you generally need to receive the corrected figures by closing, though you should still see them before you sign.
Closing Disclosure Mistakes FHA Buyers Make and How Duane Buziak Helps
The first mistake is treating the form as a formality. Some buyers confuse it with the Loan Estimate, which is a projection, or with the older HUD-1 settlement statement, which the Closing Disclosure replaced for most mortgages. The Closing Disclosure is the binding record of what you are agreeing to.
The second is wiring funds on the strength of an email. Wire fraud targeting homebuyers is a documented problem, and both the FTC and the CFPB advise verifying wire instructions by phone. Call the title company at a number you already know, from your contract or their official website, never one listed in the message asking for money.
The third is ignoring cash to close until the final day. Buyers often forget the prepaid homeowners insurance in Section F, and the escrow reserves in Section G, then scramble for funds. Budget for them when you make your offer, and confirm the figure the moment the form arrives.
Duane Buziak walks FHA clients through the Closing Disclosure line by line before closing, comparing it to the Loan Estimate and flagging anything that moved. As a broker with access to more than 500 wholesale lenders, Duane Buziak can also offer no-out-of-pocket closing options where a buyer is eligible, structured through seller credits or lender credits and always shown plainly on these pages. The NoTouch Credit Pull, a soft pull with no hard inquiry, lets you see where you stand before committing, and the Dare to Compare pricing challenge lets you test any quote you already hold.
Your Last Free Chance to Catch an Error
Before you sign, the Closing Disclosure is the one point where a mistake costs you nothing to correct. After you sign, the same error can cost real money and weeks of effort. Read all five pages, match the key figures to your Loan Estimate, and ask questions while there is still time.
Ready to take the first step toward homeownership with an FHA loan tailored to your needs? Schedule your free consultation today and discover how our award-winning team can help you navigate the path to your new home with competitive rates and expert guidance. Call FHA Mortgages by Duane Buziak at 804-212-8663 to have a Loan Estimate reviewed or to start an FHA purchase pre-approval.
