A closing statement is required in any property purchase and is a form that provides a detailed financial overview of projected payments, credits, debits and required cash or wire instructions. These numbers are ever-moving in today's contentious real estate market, so sometimes these Disclosures are not complete until moments before closing. With that said, you should always request a draft disclosure early enough to ensure you (and any of your representatives) have time to review it and ensure its accuracy.
What are some of the things you should look for?
- Check the spelling of your name
- Check that the loan term, purpose, product and loan type match your most recent Loan Estimate
- Check that the loan amount matches your most recent Loan Estimate
- Check your Interest Rate
- Does your loan have a prepayment penalty?
- Does your loan have a balloon payment?
- Check that your Estimated Monthly Payment matches your most recent Loan Estimate
- Check to see if you have items in Estimated Taxes, Insurance & Assessments that are not in escrow
- Check that your Closing Costs match your most recent Loan Estimate
- Check that your Cash to Close matches your most recent Loan Estimate
- Check that “Services Borrower Did Not Shop For” are similar to what was shown on your Loan Estimate
- Check that prices in “Services Borrower Did Shop For” match what you agreed to pay
- Check that your Seller Credit reflects what you agreed upon with seller
- Check to see how much it will cost if you make a late payment
- Check whether your lender will accept partial monthly mortgage payments
- Check to see if there will be an escrow account. If not, are you paying an escrow waiver fee to the lender?
- Check for contract details.
A sample Closing Disclosure and more information about each section can be found here.
Obviously, this is not an exhaustive list of things that are important or relevant but can be the starting point of your assessment.
A home can be one of the largest investments of your lifetime and therefore, expertise, advocacy, and forethought can save you heartache and financial trouble or ruin. We highly recommend seeking the guidance and review of these documents and their legal implications by a licensed real estate attorney.