After 8-1-2015, the new Closing Disclosure will be the primary settlement document for residential real estate transactions. The new disclosure replaces the familiar HUD-1 and Truth-In-Lending Statement (TIL), combining most of the information from these documents.
The five-page Closing Disclosure does away with the old HUD numbering system, breaking out payments and charges into several sections on three pages and incorporating loan-related disclosures on two additional pages. Here’s a brief summary of each section.
This section includes any origination charges and services the borrower did not shop for, such as Appraisal Fees and the Credit Report Fee. This also includes services they can shop for including the Title and Survey.
The section includes taxes and government fees, and also includes the Real Estate Commission and the fee for the Owner’s Title Insurance Policy. Note that the Owner’s Title Insurance is marked as “optional.” We will have more about this topic in another section.
TOTAL CLOSING COSTS
Total costs of the transaction. Lender credits are included in this section.