Closing Day: Does It Count For Cd Loan?

When closing on a home loan, it is important to understand the role of the Closing Disclosure (CD). The CD is a critical document that outlines the final terms of the loan, including interest rates, monthly payments, and closing costs. Lenders are required by law to provide the CD to borrowers at least three business days before the closing date. This three-day waiting period ensures that borrowers have time to review and understand the terms of their loan before finalizing the agreement. Sundays and federal holidays do not count towards this waiting period. The CD is typically sent electronically for the borrower's e-signature, and it is important to sign it as soon as possible to keep the loan process on track. The final CD, which outlines the exact fees of the loan, is then signed at the closing of the loan.

The Initial Closing Disclosure (CD)

The Initial CD provides estimated figures and outlines the details of the financing, including the loan's terms, monthly payment details, and itemized closing costs. It is similar to the Loan Estimate (LE) document, which is sent during the beginning stages of the mortgage loan process, so the information in the Initial CD should look familiar. However, it's important to note that the Initial CD may not always be completely accurate and is subject to adjustments.

The three-day waiting period after signing the Initial CD allows borrowers time to review and compare the final terms and costs outlined in the CD to those estimated in the Loan Estimate. It also provides an opportunity to ask the lender any questions before proceeding to the closing table. Sundays and federal holidays do not count towards the three-day waiting period, so these days should be excluded when calculating the waiting period.

After the Initial CD, the lender and title company will work together to prepare the Final Closing Disclosure (Final CD), which will provide the final and exact costs of the loan. The Final CD is typically prepared a day or two before closing and outlines the exact fees to be paid or received by the borrower at closing. It is important to carefully review the Final CD before signing to ensure all details are correct and understood.

The Final Closing Disclosure (CD)

The Final CD is the result of a collaborative effort between the lender, the title company, and the borrower. It is the final step in the loan process and ensures transparency and confidence for all parties involved. The Final CD includes information such as the loan terms, monthly payment details, and itemized closing costs. It is a comprehensive document that provides a complete breakdown of the mortgage.

The Final CD is typically prepared after the Initial Closing Disclosure (Initial CD) has been signed. The Initial CD is a time-sensitive document that requires e-signatures a minimum of three business days before closing. Sundays and federal holidays do not count towards this three-day waiting period. The Initial CD is like a “permission slip” and allows for adjustments to be made before finalizing the Final CD.

The three-day waiting period after the Initial CD is signed is important as it allows time for the borrower, lender, and title company to review and finalize the exact figures for the Final CD. It ensures that all parties are confident and well-informed before proceeding with the loan closing. The Final CD is then signed at closing, outlining the exact fees of the loan.

Overall, the Final Closing Disclosure (CD) is a crucial document in the mortgage loan process as it provides final transparency and confidence for all parties involved. It ensures that the borrower understands the final costs, terms, and details of the financing associated with their loan before committing to it.

The three-day rule

The three-day period is not measured by hours and does not include Sundays or federal holidays. For instance, if a loan is closing on a Thursday, the borrower must receive the CD by the previous Monday to satisfy the three-day waiting period. This waiting period allows borrowers to review and understand the terms of the loan, ensuring that they match the initial loan estimate provided by the lender.

The CD is typically prepared by the title company a day or two before closing. It is then sent to the borrower for their e-signature. The borrower cannot sign the loan documents until three business days have passed from the date of CD acknowledgment. This rule provides transparency and confidence for the borrower before they commit to the loan.

It is important to note that the three-day rule may not always apply. If there are issues with the CD, such as changes to the APR, loan product, or the addition of a prepayment penalty, a revised CD will be issued, and an additional three-day period will begin. This process ensures that borrowers have accurate and up-to-date information before finalising the loan.

Sundays and federal holidays don't count

When it comes to closing on a home loan, one of the most critical and time-sensitive documents you'll encounter is the Initial Closing Disclosure (CD). This document requires your e-signature a minimum of three business days before the closing date, and it's important to note that Sundays and federal holidays don't count towards this three-day waiting period.

The Initial CD is often referred to as a "permission slip" because it starts the clock ticking on the loan process. It's not the final say on the loan's numbers, but it's a crucial step that cannot be skipped. Once all parties on the loan (and sometimes even spouses who aren't on the loan) have e-signed the Initial CD, the mandatory waiting period begins.

It's worth noting that the three-day rule doesn't always apply. If there are issues with the Initial CD, a revised closing disclosure will be issued, and an additional three-day period will start to address those issues. This ensures that any problems are fixed and that you have time to understand the document before the closing appointment.

The Final Closing Disclosure (CD) is then prepared by the title company and sent to you a few days before the closing. This document outlines the final and exact costs and terms of your loan. It's important to carefully review the Final CD to confirm all the details before closing. This step ensures transparency and confidence before you sign the loan documents.

The Loan Estimate (LE)

A Loan Estimate (LE) is a standardised disclosure that lenders are required to provide borrowers within three business days of receiving a mortgage loan application. It is a three-page form that provides important details about the loan requested, including the loan terms, projected monthly payments, and closing costs.

The loan terms section includes information such as the loan amount, interest rate, loan term (e.g. 30 years), and whether there are any adjustable interest rate features or prepayment penalties. The projected monthly payments section breaks down the estimated monthly payment, including the principal and interest, mortgage insurance, and estimated escrow (such as property taxes and insurance) if applicable. The closing costs section outlines the estimated upfront costs associated with getting the loan and transferring ownership of the property, including loan origination fees, appraisal fees, and title insurance.

The LE also indicates whether there are any special features or terms associated with the loan, such as a balloon payment, interest-only payments, or a negative amortisation feature. It is important to note that the LE is an estimate, and the actual costs and terms of the loan may vary at the time of closing. However, the LE provides borrowers with a standardised document that allows them to compare loan offers from different lenders.

The LE is sent in the beginning stages of the mortgage loan process and is the predecessor to the Initial Closing Disclosure (CD), which is a time-sensitive document that requires e-signatures a minimum of three business days before closing. The CD outlines the final, exact costs and terms of the loan, which may include updated fees and terms from those outlined in the LE.

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