Understanding The Closing Disclosure (CD) - Mortgage Settlement Statement

Understanding The Closing Disclosure (CD) - Mortgage Settlement Statement

– On this video I'm gonna talk all about the Closing Disclosure or CD, which is your mortgage
settlement statement and we're getting started right now. (upbeat music) Hey, what's going on? I'm Emmett Dempsey mortgage broker and owner Treasure Coast
mortgage here in Port St. Lucie. And welcome to another video. On this channel, we're talking
talk more about mortgages, the home buying process, and some cool things around Port St. Lucie in the Treasure Coast. So if you're new here, please
think about subscribing. Okay, the Closing Disclosure. Okay we finally made it to the end made it through underwriting
and clear to close, and we're about ready to
close on your new home or your refinance.

Now what is the Closing Disclosure? and again this is a twin
little loan estimate. And if you haven't watched
the loan estimate video, you can go back and watch that. It's a twin to a loan estimate which compares to what was
disclosed on the loan estimate versus what is at the end. And usually, it should be that
the closing disclosure fees are lower than what was disclosed because when I was over disclose on
the loan estimate initially, now with the closing disclosure
is the settlement statement that you're going to sign closing. You might have gotten an
initial one electronically, which starts your three-day wait, and I'm gonna go into that in a minute. Now the CD was part of the
TILA-RESPA Integrated Disclosures that were changed in 2010.

Now one of the things that
they that they changed and was they eliminated the HUD-1, just like the Loan Estimate
eliminated a Good Faith estimate and the truth and lending
and combined them, whereas the HUD-1 is now the
Closing Disclosure or CD. Okay, so the CD is gonna
have your settlement charges what the final numbers
are, whereas your estimate had estimated numbers are and one of the pages that are on there is the the comparisons in LE and I'm going to go into a deep dive into the CD in a minute. But I wanted to point out some things is number one is a three day wait. The CFPB calls it the
consummation sentence, that's their words, not mine. So you have to wait three days before you consummate your mortgage. So I'm gonna give you an example, if you wanna close on a Friday, you got to have it done by Tuesday.

So it's basically a three-day wait. So if you sell your
sign your CD on Monday, then you can close Thursday, you know, and so on and so
forth and Saturdays do count. So it's very important when
you're planning your closing, especially if you're
you're selling your house and buying something else, you're going to really sign
your CDs as fast as you can. And usually for all the
lenders that I broker to they let you sign your CD
early before a clear to close, so there's really not that issue. So what I'm going to do now is go into a detailed Closing disclosure, here we go. Okay, here is the simple
Closing Disclosure. It mentions a simple loan estimate that I had in my loan estimate video. Again, this is a fictitious loan, it's not real client information. So basically here is Closing Disclosure. This form is the statement
of the final loan terms and closing costs. And compare this document
with your loan estimate. Now here's the the payment information, Closing date and disbursement date.

Now on a purchase in Florida, we're a wet funding state, we usually fund them the same
day that we signed paperwork, but sometimes like just sign one day and then you'll fund the next day, depending on what the
sellers and buyers are. But as the closing dates when
the paper works are signed disbursement date is when it funds. Who the settlement agent is, you know the phone number
that they associated the property to sell price, etc. Who you are the borrower,
who's the seller, who's the actual lender? Again, loan terms, you know, 30 2015, whatever they might be, purchase, fix rate, etc, FHA Conventional VA or other VA loan it from the
lender in the MIC number.

Again, that's from the the the MERS, Mortgage Electronic Registration System. That's the (clears throat) MIC number. Okay. And again, kind of matches loan estimate, here's your loan amount,
can this amount increase after closing interest rate
principal and interest. Now and ask that question
if it's an adjustable rate, that answer will be yes, if it can increase loan
amount if it's a you know, if you know now as far as things that use a Closing Disclosure is very
few negative amortizing loan but again, if there is out there eventually they come back in the market. You know that question will be yes at least you'll be in
plain language yes or no will it increase yes or no. This loan, again had a prepayment penalty most FHA and conventional
loans don't have one, but this one for an example does have one I guess it's just so
you look at this column and don't overlook it and say yep, yes.

One is a yes what why is it Yes, and here's what it looks like. And then below no Protected payments, again, this is a mortgage
insurance fall off scenarios years one through seven
months projected to habit and it falls off you see what
your payments will drop to once it falls off here is your escrows and again escrows are not controlled by
the mortgage company. So you can take a look at those. Again, here's your closing
cost and cash close. And now this is the closing
cost details in the sections match up to the Closing
Disclosure section, a origination that's for us as the broker and then the mortgage
company have a control over your points application underwriting fee things
here like your appraisal but it ended up being paid by others usually paid outside of closing. Your credit report. And again these are the final
fees on the loan estimate usually over disclose and then on the CD that they'll come down.

buying a house

Services did not shop
for basically your title. Fees or anything like that
and it's all just listed you know one by one so you can see em and then add up to D A plus B
plus C is your total closing cost your borrower paid your other costs like your recording fees,
your transfer taxes, who pays what now this over here that you didn't see on
the LE is a seller paid as you can see what seller did pay. in Florida they usually
pay the the deed stamps and the owners title and again now things that we don't know usually on the other, especially HOA, its like HOA However, their quarterly or
sometimes annually or monthly You know, so you have to kind of settle up because a seller isn't
responsible for the whole year, only for what they have. So you can see that they you know, so you have to pay your first month of HOA to get current, whatever your home inspection fee I guess you had to get one on this loan.

And it shows what the real
estate commissions are in your title insurance is paid for. I want to show you this here, you know, calculating cash to close
talks about the loan estimate the last one that was
that was shown to you and you were scheduled
to do 16 cash to close ended up being a little bit
better like 14 cash to close. So that's kind of what you can compare. Now this is the the summary. Credit from the seller, you know, did about $80
paid by seller advanced because they paid the
first 15 days of that month so they gotta pay it back
to credit the seller back and usually you'll see
what's called tax-perations.

That's big in Florida because your escrow will have the full amount due for taxes but you'll get the credit from the seller for the amount of time
that they own the house. So, a lot of times the
loans being cash to close can be a lot higher because it
doesn't have those perations as well as the accurate
adjustment for your you know, for that. (clears throat) So, there's that And then down here you have what is a simple demand feature. Again, it all matches the
Loan Estimate negative amortization partial payments, no, you can't make partial payments. And this is a throwback
to the Truth in Lending. You know, again, they're all
combined as part of trade. Escrow account For now, we'll have an escrow account. It shows you what's your
property costs over, you know, the one year initial payment to the escrow and then your monthly escrow payment.

And then if you waive escrow, you know that box will be checked in here's your total payments. Again, that's a throwback to the Truth in Lending,
your finance charges, your a your APR, your final APR compared
to what you disclosed And here's a list of all
the contact information for the broker. I'm a mortgage broker. So my information will be here, and you know, the real estate
for the buyer, the seller and settlement agent and
the lender that we chose.

So, and then again, this
is where you would sign you know most of time you e-sign a couple of days before closing. Now a lot of what we do, like you'll assign an initial CD that will be about 99% correct, you know, cash or close before it's what we call
balance with a title company. And then again, that's the
structure three-day wait that we talked about
previously in the video. So you backup if you have
any questions about that? But yeah, so you need to
have you know three days, you know, to before the
consummation of your mortgage. So just, you know, quick rule of thumb, you want to close on a Friday, you got to have it done by Tuesday. So usually, I take care
of that three-day wait, even before we're clear to close, but you know, you'll get your initial CD, and then you'll get the final CD.

So you know, how much
cash you have to wire, how much cash you're getting, etc. So, that's in a nutshell, and here we go. Okay. And welcome back. I hope that was informative
look at the Closing Disclosure. You know, congratulations
on your new home loan. hopefully I was the one who
did have it done for you. But if you have any different
questions about the CD and other disclosures, definitely give me a
call dempseymortgage.com Thank you so much for watching and I'll see you in the next one..

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