Closing documentsClosing Disclosure vs settlement statement: what is the difference?
The Closing Disclosure is the lender's federal form for a consumer mortgage: the borrower must receive it at least 3 business days before closing and it shows the final loan terms and costs. A settlement statement is the title or escrow company's itemized list of every charge and credit for buyer and seller at closing. A cash buyer gets a settlement statement but no Closing Disclosure.
Side by side
Closing Disclosure – who and when
Required by federal rules (TRID) for most consumer mortgages; the lender makes sure the borrower receives it at least 3 business days before consummation.
Closing Disclosure – what
Final loan terms, projected payments, closing costs and cash to close, in a standard format comparable with the Loan Estimate.
Settlement statement – who
Prepared by the title, escrow or settlement agent – often on an industry form (for example the ALTA settlement statement).
Settlement statement – what
Every debit and credit for buyer and seller: price, deposits, prorations, payoffs, commissions, fees.
The seller's side
The settlement agent gives the seller its own disclosure no later than the day of consummation.
Cash purchases
No loan, no Closing Disclosure – the settlement statement shows the money.
What the TC checks
- The Closing Disclosure receive-by date against the closing date.
- Price, earnest money credit, option fee credit (Texas) and seller concessions on both documents.
- Commissions and any TC fee as agreed in writing.
- That the numbers on the settlement statement match the Closing Disclosure for the buyer's loan.
Questions about closing documents
Is the Closing Disclosure the same as a settlement statement?
No. The Closing Disclosure is the lender's federal loan form; the settlement statement is the title or escrow company's itemized statement of all charges and credits.
When do I get the Closing Disclosure?
At least 3 business days before closing, if your loan is covered by the rule.
Does the seller get a Closing Disclosure?
The settlement agent gives the seller its own disclosure no later than the day of closing; sellers also see the settlement statement.
Do cash buyers get a Closing Disclosure?
No. Without a loan there is no Closing Disclosure; the settlement statement shows the funds.
What is an ALTA settlement statement?
A standard settlement statement form from the American Land Title Association that many title and escrow companies use.
Related
ClosingCode keeps the closing milestones on one timeline and reminds the team before each one – with updates to clients in English or Spanish.
Start free trialSources: 12 CFR 1026.19(f)(1) (borrower's Closing Disclosure, 3 business days) and 1026.19(f)(4)(ii) (seller's disclosures no later than the day of consummation), CFPB Regulation Z; settlement statement forms vary by company.
General information, not legal or lending advice. ClosingCode is software; it is not a lender, title company, law firm or brokerage.