How to Read Your Closing Disclosure Line by Line

The Closing Disclosure is the five-page form that shows the final terms of your mortgage and every dollar changing hands at closing. To read it, start with page 1 (loan terms and monthly payment), then page 2 (itemized closing costs), then page 3 (cash to close and seller credits), and compare each section to your most recent Loan Estimate. If anything differs from what you expected, ask your lender and settlement agent right away, while there’s still time to fix it before closing day.

When you get it and why the timing matters

Federal rules require your lender to provide the Closing Disclosure at least three business days before you close, according to the CFPB. A few changes restart that clock with a new three-day wait: an increase in the APR beyond a small tolerance, a change in loan product (for example, fixed to adjustable), or adding a prepayment penalty. Most other corrections can be made without delaying closing, so speak up early.

In Virginia, the settlement agent (often a title company or attorney) prepares the settlement figures, and the lender issues the Closing Disclosure. You’ll usually see the final version a few days before signing, sometimes with a revised copy the day before. My closing day guide walks through the appointment itself.

Page 1: loan terms, payments and costs at closing

• Top section: check your name, property address, sale price, loan term, purpose, product (fixed or adjustable) and loan type (conventional, FHA, VA).
• Loan Terms: loan amount, interest rate and monthly principal and interest. Look at the ‘Can this amount increase after closing?’ column and the prepayment penalty and balloon payment rows; for most buyers, both should read ‘NO.’
• Projected Payments: your estimated total monthly payment, including mortgage insurance and escrow for taxes and homeowners insurance. Confirm whether HOA dues are in escrow (they usually aren’t).
• Costs at Closing: total closing costs and cash to close. These should be close to your Loan Estimate; if not, page 2 tells you why.

Page 2: closing cost details

Page 2 is where the money is itemized. The Loan Costs side covers what the lender and its required providers charge; Other Costs covers taxes, prepaids and escrow.

Section	What it includes	What to check
A. Origination Charges	Lender fees and any discount points	Points match what you chose; fees match the Loan Estimate
B. Services You Did Not Shop For	Appraisal, credit report, flood certification	Shouldn’t increase beyond tolerance
C. Services You Did Shop For	Title search, settlement fee, lender’s title insurance, survey	Matches the provider you selected
E. Taxes and Other Government Fees	Recording fees; Virginia recordation taxes on the deed and deed of trust	Amounts reflect price and loan amount
F. Prepaids	First year of homeowners insurance, prepaid interest, sometimes property tax	Insurance premium matches your policy
G. Initial Escrow Payment	Cushion for taxes and insurance	Months collected look reasonable
H. Other	Owner’s title insurance, HOA fees, home warranty, agent fees	Each item is something you agreed to
J. Total Closing Costs	Sum of loan and other costs, less lender credits	Lender credit matches your rate lock

By local custom, Virginia buyers typically pay the state and local recordation taxes, which appear in Section E; sellers pay the grantor tax and the two Northern Virginia regional transportation fees. My post on grantor and recordation taxes explains the math, and title insurance explained covers the owner’s policy in Section H.

Page 3: calculating cash to close

Page 3 reconciles the Loan Estimate with the final numbers and shows the summary of the transaction. Confirm these line by line:

1. Deposit: your earnest money should appear as a credit.
2. Seller Credits: the amount should match your ratified contract and any addenda; my post on seller credits versus price reductions explains how credits work.
3. Adjustments and prorations: property taxes and HOA dues are prorated to the closing date; check the dates.
4. Did this change? column: each ‘YES’ should come with an explanation you understand.
5. Cash to Close: this is what you’ll wire or bring. It should be within a reasonable range of what your lender told you.

Pages 4 and 5: loan disclosures and calculations

• Assumption: whether a future buyer could take over your loan (often yes for FHA and VA, usually no for conventional).
• Late payment and partial payment policies, and whether you have an escrow account.
• Total of Payments, Finance Charge and APR: what the loan costs over its full term if you keep it.
• Total Interest Percentage (TIP): total interest over the life of the loan as a percentage of the loan amount.
• Contact Information: names and license numbers for the lender, agents and settlement agent. Save this; it’s also your reference for verifying wiring instructions.

Fee tolerances: which costs can change

Tolerance	Examples	Rule
Zero tolerance	Lender fees, discount points, transfer taxes, services you weren’t allowed to shop for	Can’t increase from the Loan Estimate without a valid changed circumstance
10% cumulative	Recording fees; third-party services you could shop for but chose from the lender’s list	Total can’t rise more than 10%
No limit	Prepaid interest, insurance premiums, escrow deposits, services from providers you chose yourself	Can change in good faith

If a zero or 10% tolerance cost goes over the limit without a valid reason, the lender must refund the difference. The CFPB’s Closing Disclosure explainer walks through a sample form.

A worked example: checking cash to close

Here’s an illustrative, rounded example of a $500,000 purchase with a $450,000 loan in Northern Virginia. It isn’t a quote.

Line (illustrative)	Amount
Total closing costs (J)	$13,500
Down payment (price minus loan)	$50,000
Deposit (earnest money already paid)	minus $10,000
Seller credits	minus $5,000
Adjustments (prorated taxes and HOA)	minus $400
Cash to close	$48,100

If your contract said the seller would credit $7,500 and page 3 shows $5,000, that’s a $2,500 error worth catching. Raise it with your agent and settlement company the day you receive the form.

Common mistakes

• Reading only the cash-to-close number and skipping the itemized fees on page 2.
• Not comparing against the most recent Loan Estimate, especially after a rate lock or a change in loan amount.
• Missing a seller credit or repair credit that was agreed in an addendum.
• Paying for optional items (like a home warranty) you didn’t request.
• Wiring money based on emailed instructions without calling to verify; read my wire fraud guide first.

This is general information. For questions about your specific loan, ask your lender, and for legal questions, a Virginia real estate attorney.

Frequently asked questions

How many days before closing do you get the Closing Disclosure?

Your lender must provide it at least three business days before closing. Certain changes, like a significant APR increase or a new loan product, trigger a new three-day waiting period.

What is the difference between a Loan Estimate and a Closing Disclosure?

The Loan Estimate comes within three business days of applying and gives estimated terms and costs. The Closing Disclosure shows the final terms and costs and arrives before closing.

Can closing costs change after the Closing Disclosure?

Small changes can still happen, such as updated prorations or recording fees, and the lender may issue a corrected disclosure. Questions about increases should go to your lender immediately.

Where are Virginia recordation taxes on the Closing Disclosure?

They appear on page 2 in Section E, Taxes and Other Government Fees, usually listed for both the deed and the deed of trust.