It may seem unlikely, but closing is a major commitment, and a lot can happen in the days before consummation of the transaction. Additionally, you may decide to switch from a fixed-rate to an adjustable mortgage. Payment penalties are rare and likely won’t appear in a closing disclosure without prior notice. A payment penalty has been added to your loan.A change in the annual percentage rate for the loan.There are only three ways for this to occur: When this occurs, an additional three day period will begin to ensure that you can prepare. If issues are present, they must be fixed, and a revised closing disclosure will be issued. What if there are issues within the closing disclosure? Three days may be ample time for you to review and understand the document, but may not be enough to fix any problems. No, the three day rule doesn’t always apply. For example, if you are closing on a Friday, but a holiday lands on Wednesday, you will receive the closing disclosure by the preceding Monday instead of Tuesday. If a holiday lands on any day other than Sunday within the period, this must be factored into the timeline. In this case, you technically have four days to review the document before closing, but only three days count as part of the three-day rule. However, If you are closing on Tuesday, you are to receive it on the preceding Friday. This gives you three consecutive days to review the document before closing. If you are closing on Friday, the lender must have the closing disclosure to you by the preceding Tuesday. This means you may technically have more than three days before closing to review the document. But Sundays and Nationally recognized holidays do not count. The three-day rule applies to business days, including Saturdays. You know what will be expected of you well before you become legally obligated to fulfill your end of the contract.
Receiving the closing disclosure three days in advance ensures you will have had enough time to deal with any potential issues and know what you will owe upon consummation. This rule is simply put into place to ensure you have received the closing disclosure three days before closing.
The Three Day Ruleīut how long before closing should you be supplied with the CD? This is where the Three Day Rule comes into play. The agent handling your closing services will also be happy to explain anything else that has your worried at the appointment and likely before. Instead, they want you to feel prepared and collected.
Nobody wants you to feel confused or frustrated at the closing table. The timeline helps promote a smooth closing process. If they do exist, you want to address them before closing. Some variances are to be expected, while others shouldn’t be present at all. It’s important to note that the loan estimate is an estimation of payments and fees. You are making sure the closing disclosure matches the loan estimate as closely as possible to avoid hold ups at closing. The first and most important thing to do with your closing disclosure is to compare the loan estimate on the document with the loan papers you received after applying for your loan. The three day timeline exists to ensure that you have enough time to remedy any discrepancies or issues within this document. This just adds too your pile of work.īut never fear! We’re here to help you through the ins and outs of the closing disclosure and purchasing a property so you can comply with the three day timeline.įor starters, you already know it’s your job to review the closing disclosure immediately upon receiving it. The anxiety and confusion is mostly caused because the closing disclosure will only be in your possession just a few days before your closing appointment, and you’ve already had to deal with a million papers and meetings and inspections. Why? Because you’re told to act immediately upon receiving it, and let’s face it, if you’re not a lawyer this can be intimidating. A closing disclosure can become very frustrating and cause anxiety when you first read it. As you’re closing on a home, helping a client, or brokering a deal you’ll come across a document called the closing disclosure (or CD).
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