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How do you read a Closing Disclosure?

Short answer

Check five things: the loan terms (rate, payment, prepayment penalty), the cash-to-close figure on page 1, that Section A fees match your Loan Estimate (they can't legally increase), that Section C increases are under 10%, and that seller credits actually appear. You get it 3 business days before signing — use them.

Closing Disclosure audit checklist

Where	What to verify	Red flag
Page 1, Loan Terms	Rate, monthly payment, fixed vs ARM	Any change from the Loan Estimate
Page 1, Cash to Close	Matches your bank balance plan	Surprise increases
Page 2, Section A	Lender fees identical to LE	Zero-tolerance violation
Page 2, Section C	Title/escrow within 10% of LE	Fee creep on shopped services
Page 3, Summaries	Seller credit and earnest money applied	Missing credits

How to read this table

With 5 reference points in the "closing disclosure audit checklist" table, the fastest way to use this page is to find the closest row, take its what to verify, then stress-test it ±30% before you build a plan on it.

Context

The 3-day rule exists so you can push back: if a zero-tolerance fee increased, the lender must cure it; if key terms (APR, prepayment penalty, loan product) change, a new 3-day clock starts. Compare the CD side-by-side with your last Loan Estimate — the form was redesigned in 2015 specifically so the two line up. The 'Summaries of Transactions' page is where prorations, credits, and your earnest money deposit land; most last-minute surprises hide there.

What moves this number

Financing terms

Rate, down payment and amortisation drive cash-on-cash return more than purchase price does. The same building can cash-flow or bleed depending on the loan.

True operating expense ratio

Management, insurance, tax, maintenance, vacancy and capital reserve typically consume 35–50% of gross rent. Models that skip reserves overstate returns badly.

Vacancy and turnover

One 45-day vacancy plus a turn can erase a year of thin cash flow. Underwrite 5–8% vacancy even in tight markets.

Local regulation

Rent rules, short-term rental caps and licensing requirements change the achievable revenue of an identical property between neighbouring cities.

Methodology

Structure and tolerance rules per the CFPB TRID rule (0% tolerance on lender fees and services you couldn't shop; 10% cumulative on shopped third-party services from the lender's list).

Assumptions and caveats

Returns exclude appreciation and principal paydown unless a row states otherwise.
Local tax, insurance and regulation can move these figures by several points in either direction.
This page was last reviewed on 2026-10-01. Ranges are updated as new data lands, so re-check before using them in a contract or a plan.
Use these numbers as a starting range, not a guarantee — your own historical data always beats a benchmark.

Frequently asked questions