What is included in a closing disclosure document?

The closing disclosure document is a critical component in the real estate transaction process, specifically designed to inform borrowers about the final terms and costs associated with their mortgage loan. It outlines essential details such as the loan amount, interest rate, monthly payment, and total costs relating to the mortgage, including closing costs, lender fees, and other financial obligations.

This document serves to ensure transparency for buyers, allowing them to compare the final terms to the initial loan estimate provided during the application process. It helps borrowers confirm that they understand their financial commitments before finalizing the transaction. The precise breakdown of all the fees and terms makes it clear what the borrower will be responsible for, aiding in informed decision-making.

Other answer choices pertain to relevant aspects of a real estate transaction but do not constitute the primary focus of the closing disclosure. While property taxes, real estate commissions, and property inspections are all key parts of the real estate process, they are not the main components of the closing disclosure document itself. Thus, the inclusion of a detailed outline of final terms and costs of a mortgage loan accurately reflects the purpose and details found in a closing disclosure.