How to Read Your Closing Disclosure: A Line-by-Line Guide

Your Closing Disclosure is one of the most important documents you'll receive during the homebuying process. This standardized form, required by federal law since 2015, replaces the old HUD-1 Settlement Statement and provides a clear breakdown of every dollar you'll pay at closing.

Yet many homebuyers simply skim the document or trust that everything is correct. That's a costly mistake. Errors on Closing Disclosures are surprisingly common, from incorrect interest rates to inflated fees to missing credits. According to industry studies, nearly 40% of Closing Disclosures contain at least one error that impacts the borrower's costs.

At Prospect Title, we've helped thousands of Utah homebuyers navigate their Closing Disclosures over our 59 years in business. We've seen every type of error, discrepancy, and point of confusion. This guide will walk you through the entire form, page by page and line by line, so you can approach your closing with confidence.

What Is the Closing Disclosure and Why Does It Matter?

The Closing Disclosure is a standardized, five-page form that details the final terms of your mortgage loan and all costs associated with your real estate transaction. Created as part of the TILA-RESPA Integrated Disclosure (TRID) rule, it replaced the separate Truth in Lending disclosure and HUD-1 Settlement Statement that were previously used.

The CD serves several critical purposes. First, it provides transparency about your loan terms and closing costs, making it easier to understand exactly what you're agreeing to. Second, it allows you to compare the final costs to the Loan Estimate you received when you applied for the mortgage. Third, it gives you three business days to review everything before you're required to sign at closing.

Your lender is responsible for preparing and delivering the Closing Disclosure, though much of the information comes from your title company, real estate agents, and other parties to the transaction. In Utah, title companies like Prospect Title provide settlement service details, recording fees, and title insurance costs that populate sections of the CD.

Understanding this document protects you in multiple ways. You can catch math errors before they cost you money. You can verify that promised credits or concessions appear correctly. You can confirm your loan terms match what you agreed to. And you can question any fees that seem excessive or unexplained.

When and How Should You Receive Your Closing Disclosure?

Timing matters with the Closing Disclosure. Your lender must deliver it to you no later than three business days before your loan closing. The delivery method affects when the three-day period starts:

• In-person delivery or electronic consent: The three-day period begins the same day you receive it
• Mail delivery: The three-day period begins three days after it's mailed (allowing time for transit)
• Email without prior e-consent: Not acceptable for the initial CD

Most lenders today deliver the Closing Disclosure electronically if you've provided consent to receive electronic documents. This speeds up the process and ensures you receive it immediately. Once received, you should download or print a copy for your records and begin your review right away.

In Utah real estate transactions, closings typically happen fairly quickly once a purchase agreement is signed. However, the three-day CD requirement means you need to factor this waiting period into your timeline. If you're hoping to close by month-end for timing or rate lock reasons, make sure your lender has everything needed to prepare the CD with enough buffer time.

How Do I Read Page 1 of the Closing Disclosure?

Page 1 of the Closing Disclosure provides a high-level overview of your loan terms and the key numbers that determine what you'll pay at closing. Let's break down each section:

Closing Information

The top of the page identifies the closing date, disbursement date, settlement agent, file number, and property details. Verify that the property address is correct and matches your purchase agreement. The settlement agent in Utah is typically your title company. Confirm the closing date matches your schedule.

Transaction Information

This section shows the borrower and seller names, lender information, and identifies whether this is a purchase or refinance. Double-check that all names are spelled correctly and match government IDs, as errors here can delay recording of your deed.

Loan Terms

This critical section outlines your loan amount, interest rate, monthly principal and interest payment, and whether these can change. Key items to verify:

• Loan Amount: Should match your purchase agreement price minus your down payment
• Interest Rate: Should match what you locked in with your lender
• Monthly P&I: Your principal and interest payment (note: this doesn't include taxes, insurance, or HOA fees)
• "Can this amount increase after closing?" Indicates if you have an adjustable-rate mortgage
• Prepayment Penalty: Whether you'll pay a fee for paying off the loan early
• Balloon Payment: Whether you'll owe a large payment at a certain point

Projected Payments

This table shows your total monthly payment, including principal, interest, mortgage insurance, and estimated escrow amounts for property taxes and homeowners insurance. In Utah, property taxes vary significantly by county, so verify the estimated tax amount seems reasonable for your area. The table also shows how your payment might change over time if you have an ARM or if mortgage insurance will drop off.

Costs at Closing

The bottom of page 1 shows two critical numbers: (1) your total closing costs, and (2) the cash you need to bring to closing. The "cash to close" number is what you actually need to wire or bring via cashier's check. This includes your down payment, closing costs, and any adjustments, minus credits from the seller or lender.

What Information Is on Page 2 of the Closing Disclosure?

Page 2 is where the detailed cost breakdown lives. This is the most important page to scrutinize because it lists every fee you're paying. The page is divided into sections that categorize different types of costs.

Section A: Origination Charges

These are fees your lender charges for processing your loan. Common items include:

• Loan origination fee: Usually 0.5-1% of the loan amount
• Discount points: Optional fees to reduce your interest rate
• Application fee: Administrative charge for processing your application
• Underwriting fee: Covers the cost of evaluating your creditworthiness

Compare these to your Loan Estimate. Origination charges are in a category where costs cannot increase by more than 10% from the LE.

Section B: Services You Cannot Shop For

These are third-party services where your lender requires you to use a specific provider. They include:

• Appraisal fee: Usually $400-600 for a standard home appraisal in Utah
• Credit report fee: Typically $25-50
• Flood certification: Determines if the property is in a flood zone
• Tax service fee: Monitors that property taxes get paid

These fees also cannot increase by more than 10% from your Loan Estimate.

Section C: Services You Can Shop For

This section includes settlement services where you have the right to shop around. In Utah, this commonly includes:

• Title search and exam fee: The title company's fee for researching the property's title history
• Title insurance premiums: Both lender's and owner's title insurance
• Settlement or closing fee: The title company's fee for conducting the closing
• Survey fee: If a new survey was required

If you chose a provider your lender recommended, these fees cannot increase by more than 10% in total. If you selected a provider on your own, the fees can vary but should still be reasonable.

Section E: Taxes and Government Fees

This section lists recording fees and transfer taxes. In Utah, these typically include:

• Recording fees: County charges to record the deed and mortgage (usually $50-100 per document)
• Transfer tax: Utah does not have a state transfer tax, but some local jurisdictions may charge fees

These fees are set by government entities and can change without impacting the accuracy of your Loan Estimate.

Section F: Prepaids

Prepaid costs are expenses you pay at closing for services you'll receive after closing:

• Homeowners insurance premium: Usually the first year's premium
• Prepaid interest: Interest from your closing date to the end of the month
• Property taxes: If taxes are due soon, you may prepay a portion

Prepaid costs can vary from your Loan Estimate because they depend on your actual closing date and current insurance/tax amounts.

Section G: Initial Escrow Payment at Closing

If you're setting up an escrow account, this section shows what you'll deposit at closing. Lenders typically collect 2-3 months of homeowners insurance premiums, 2-6 months of property taxes, and may add a cushion. Utah property tax timing affects how much you'll need to escrow.

Section H: Other

This catches miscellaneous costs like HOA fees, home warranty premiums, or other charges specific to your transaction.

How Should I Compare My Closing Disclosure to My Loan Estimate?

The federal government designed the Closing Disclosure and Loan Estimate to have similar formats specifically so you can compare them side by side. This comparison is critical because it helps you identify costs that increased unexpectedly or credits that disappeared.

Page 3 of your Closing Disclosure includes a comparison table that makes this easier. It shows your original Loan Estimate amounts, your final CD amounts, and whether each category increased or decreased. But you should also do your own detailed comparison.

Fee Tolerance Categories

Federal rules limit how much certain fees can increase from Loan Estimate to Closing Disclosure:

If fees exceed these tolerance limits, your lender must cure the violation by reducing other charges or reimbursing you the excess amount. This is your legal right, so don't be afraid to question increases.

Common Red Flags

Watch for these common issues when comparing documents:

• Interest rate that's higher than what you locked in
• Loan amount that doesn't match your purchase price and down payment
• Missing seller credits or lender credits that were promised
• Duplicate fees (being charged twice for the same service)
• Inflated title insurance or settlement fees beyond market rates
• HOA transfer fees or special assessments you weren't told about
• Prepaid interest calculated for more days than expected

If you spot any of these red flags, contact your lender and your title company immediately. In Utah, Prospect Title works closely with lenders to ensure accuracy, but mistakes still happen. It's much easier to fix errors before closing than after.

What Are the Most Common Errors on Closing Disclosures?

Despite the standardized format and careful preparation, Closing Disclosure errors occur frequently. After 59 years in the title business, we've seen patterns in the types of mistakes that slip through:

Mathematical Errors

Simple calculation mistakes are surprisingly common. The CD involves dozens of numbers that must be added, subtracted, and allocated correctly between buyer and seller. Errors in proration calculations for property taxes, HOA dues, or utilities can throw off the final cash-to-close amount.

Missing Credits

Seller concessions, lender credits, or earnest money deposits sometimes fail to appear on the CD. Your purchase agreement should specify any seller-paid costs or credits. Verify every credit you negotiated shows up in the correct amount.

Incorrect Interest Rate or Loan Amount

These are serious errors that can significantly impact your monthly payment and total loan cost. They might occur if your lender pulled incorrect information from their system or if a last-minute loan amount change wasn't reflected.

Property Tax Prorations

Utah property taxes are paid in arrears (you pay in November for the current year). Calculating how much the seller owes you for their portion of the year can be complex. Errors in the number of days or the annual tax amount will affect your closing costs.

Escrow Account Calculations

Lenders sometimes collect too much or too little for the initial escrow account. While they're allowed a cushion, excessive escrow deposits unnecessarily increase your cash to close.

Title Insurance Premium Errors

While Utah has regulated title insurance rates, data entry errors can result in charging the wrong premium based on an incorrect loan amount or purchase price. Always verify the title insurance premium matches the regulated rate for your actual loan amount.

What Should I Do If I Find an Error or Have Questions?

If you spot something that doesn't look right on your Closing Disclosure, act immediately. Time is critical because you need to resolve issues before your scheduled closing date. Here's what to do:

Step 1: Document the Issue

Write down specifically what appears incorrect. Note the line item, the amount shown, what you believe it should be, and your reason for questioning it. Having this documented helps your lender or title company address the issue efficiently.

Step 2: Contact Your Lender and Title Company

Call (don't just email) your loan officer and your title company contact. Explain the issue clearly. In Utah, title companies like Prospect Title have experienced staff who can quickly verify information and coordinate corrections with the lender.

Step 3: Provide Supporting Documentation

If the error involves a contracted credit or specific agreement, provide copies of the purchase agreement, amendment, or rate lock confirmation. This documentation proves what the correct information should be.

Step 4: Get a Revised Closing Disclosure

For significant errors affecting the loan amount, interest rate, APR, or adding a prepayment penalty, federal law requires a revised CD and a new three-day waiting period. For minor corrections that don't trigger these issues, changes can sometimes be made at closing. Your lender will determine which category your correction falls into.

Step 5: Understand Potential Timing Impacts

If a revised CD is required, your closing date will likely be delayed by at least three business days. This can affect rate locks, moving schedules, and lease end dates. Discuss the timing implications with all parties.

Step 6: Verify the Correction

Once you receive a corrected CD, verify that the specific issue was fixed and that the correction didn't introduce new errors. Check that all other numbers still look correct.

Remember, asking questions doesn't make you difficult. It makes you informed. Any reputable lender or title company welcomes questions and wants to ensure your CD is accurate. At Prospect Title, we encourage all our clients to thoroughly review their closing documents and reach out with any concerns, no matter how small they might seem.

What Are Pages 3, 4, and 5 of the Closing Disclosure?

The final three pages of the Closing Disclosure provide additional important information and breakdowns that complete the picture of your transaction.

Page 3: Calculating Cash to Close and Summaries

Page 3 shows the detailed calculation of how your cash-to-close amount was determined. It includes:

• A comparison of your Loan Estimate and final Closing Disclosure figures
• Your total closing costs broken down by category
• The complete calculation showing: loan amount, down payment, closing costs, seller credits, and adjustments
• A summaries section explaining what's included in various line items

This page is particularly useful for understanding why your final cash to close differs from what was estimated. Maybe your closing date changed, affecting prepaid interest. Maybe your homeowners insurance premium was different than estimated. The explanations help you understand the variations.

Page 4: Additional Information About Your Loan

Page 4 provides disclosures about loan features and protections:

• Appraisal disclosure: Confirms you're entitled to a copy of the appraisal
• Contract details: Identifies whether you may be personally liable if you default (in Utah, most residential mortgages are non-recourse)
• Assumption clause: States whether someone could assume your loan if you sell
• Late payment policy: Explains late fees and grace periods
• Refinance statement: Reminds you that refinancing in the future will require a new appraisal and closing costs
• Servicer information: Details about whether your loan may be sold or serviced by another company

Page 5: Loan Calculations and Other Considerations

The final page includes:

• APR: Your Annual Percentage Rate, which reflects the true cost of the loan including interest and fees
• TIP: Total Interest Percentage, showing how much interest you'll pay over the loan term as a percentage of the loan amount
• Total principal and interest: The sum of all monthly payments over the life of the loan
• Contact information: Names, addresses, and phone numbers for your lender, mortgage broker, real estate agents, and settlement agent
• Confirm receipt: A signature section acknowledging you received the CD (though this signature doesn't obligate you to proceed with the loan)

Pay attention to the APR and TIP calculations. These numbers help you compare the true cost of different loan offers. A loan with a lower interest rate but higher fees might actually be more expensive, which would be reflected in a higher APR.

How Can I Prepare for a Smooth Closing After Reviewing My CD?

Once you've thoroughly reviewed your Closing Disclosure and resolved any issues, you can prepare for a successful closing day. Here's how to ensure everything goes smoothly:

Arrange Your Funds

The cash-to-close amount on page 1 of your CD is what you need to bring. In Utah, title companies typically require these funds via wire transfer or cashier's check. Personal checks are rarely accepted for large amounts. Contact your bank several days before closing to arrange a wire transfer, as some banks have daily wire limits that could require multiple days to transfer large amounts.

Verify Wire Instructions Carefully

Wire fraud targeting real estate closings has become increasingly common. Always verify wire instructions by calling your title company at a phone number you look up independently (not one provided in an email). Prospect Title will never send wire instructions solely via email without verbal confirmation. Learn more about protecting yourself in our guide on real estate wire fraud protection.

Review Your Final Walk-Through

Conduct a final walk-through of the property within 24 hours of closing to ensure its condition matches what you agreed to purchase. If you discover new damage or missing appliances, address these issues before closing or negotiate appropriate credits.

Bring Required Identification

You'll need a valid government-issued photo ID for the closing. If your name on the ID doesn't exactly match the name on the CD (for example, you use a middle initial on your ID but not on the CD), mention this to your title company beforehand to avoid delays.

Plan for Time

Closings typically take 30-60 minutes, though they can take longer if issues arise. Schedule accordingly and avoid booking the closing right before an important meeting or flight. In Utah, Prospect Title strives to make closings efficient while ensuring you understand every document you sign.

Keep Your Closing Disclosure

Bring your CD to the closing for reference. While you'll sign a final version at closing that may have minor corrections, having your advance copy helps you follow along and catch any unexpected changes.

Understand What You're Signing

You'll sign many documents at closing beyond the Closing Disclosure. These include the promissory note (your promise to repay the loan), the deed of trust or mortgage (the security instrument giving the lender a lien on the property), and various affidavits and disclosures. Don't hesitate to ask questions about any document you're signing.