The Closing Disclosure Explained

The Closing Disclosure, previously called the Hud1 for over 30 years, is a five-page form that details all the final costs associated with a purchase or refinance transaction. At the beginning of the mortgage application process, you receive a Loan Estimate detailing the estimated fees, the Closing Disclosure is a similar formatted form with the final costs.  The intent of this form is so that the consumer can get a full explanation of the charges they are paying in writing well prior to settlement. Consumers typically did not see the equivalent “Hud-1” until the actual date of settlement. 



The Closing Disclosure is a layout of the upfront costs at settlement, breakdown of monthly mortgage payment, loan terms, and life of the loan cost. The Closing Disclosure also highlights if there were any changes from the original Loan Estimate, so there are no surprises to the client. The Closing Disclosure must be sent to the client and signed, no fewer than three business days before settlement, as required  by law as of October 3, 2015.



The Closing Disclosure three-day rule allows for clients to have time to review and understand their final terms prior to settlement taking place. This time frame grants for asking questions and making revisions if needed prior to closing day. Additionally, clients are given three more days, if there are any last minute key changes in their annual percentage rate (APR) of more than an eight in rate, addition of a prepayment penalty, or changes in a loan product. Kevin Berju, AFN Branch Manager, www.PhillyMortgageTeam.com



Article Written By: Kevin Berju, Branch Manager AFN, www.PhillyMortgageTeam.com

American Financial Network NMLS # 137213




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Kevin Berju starts Philly Mortgage Team with over 25 years in the mortgage industry. Prior to working with residential and commercial mortgages, Kevin graduated with a business degree from Temple University, owned his own business, and worked as an agent for years in both commercial & residential Real Estate. With Kevin’s diverse knowledge of the real estate and mortgage industries, his clients are thoroughly guided throughout their home buying or refinance process. As a result of his knowledge, attention to detail, responsiveness to his clients, and exceptional work ethic, Kevin was awarded the Five Star Mortgage Professional recognition in Philadelphia Magazine for the past successive years as well as reaching the top 1% of all originators country wide since 2012 as designated by Mortgage Executive magazine.

As a mortgage professional for over 2 decades, Kevin is an invaluable resource for both first-time and experienced home buyers. With his accomplishment of the Certified Mortgage Planning Specialist designation, Kevin is placed in an elite group of the top 5% of mortgage professionals in the industry. Looking to Purchase or Refinance in Pennsylvania, New Jersey, or Florida? Kevin Berju is the Lender for You!


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