Which document provides a breakdown of closing costs to a borrower?

The Closing Disclosure form is specifically designed to provide borrowers with a detailed breakdown of their closing costs. This document is required to be provided to borrowers at least three business days before closing on a mortgage, allowing them an opportunity to review the final terms of their loan as well as the costs associated with the closing of the transaction.

The Closing Disclosure includes all important financial information, such as loan terms, interest rates, monthly payments, and, crucially, a comprehensive list of all the costs involved in the transaction. This transparency helps borrowers understand exactly what they are paying for, assisting them in making informed decisions about their home purchase or refinancing.

In contrast, while the Loan Estimate form provides an initial estimate of the closing costs early in the mortgage process, it may not include the final figures that are present in the Closing Disclosure. The Truth in Lending Disclosure focuses on the cost of credit and the terms of the loan in a different format, without itemizing closing costs in the same way. The Settlement Statement, while it serves to account for all credits and debits for both the buyer and seller, is typically used in different contexts and may not be standardized for all types of loans like the Closing Disclosure is. Thus, the Closing Disclosure stands out as the definitive document