How does cost information in the Closing Disclosure differ from the information in the Loan Estimate?

The Closing Disclosure (CD) provides a detailed accounting of the actual closing costs a borrower will face upon finalizing a mortgage transaction. This includes a comprehensive breakdown of the exact amounts owed at closing, which can differ from earlier estimates. Conversely, the Loan Estimate (LE) is intended to give borrowers a clear initial view of their expected costs associated with a loan, based on best available information at that time, often reflecting estimated costs that may be subject to change.

The key difference lies in the precision of the figures presented. The CD reflects finalized costs that have been agreed upon and determined to be accurate, while the LE details projected costs that lenders provide when the application is made, which are estimates and designed to offer borrowers an idea of what to expect financially. This distinction is vital for borrowers as it helps them understand what they will actually be responsible for at closing versus what they might have anticipated based on earlier estimates.