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Understanding The Closing Disclosure (CD) - Mortgage Settlement Statement - YouTube
Channel: Emmett Dempsey
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- On this video I'm gonna talk all about
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the Closing Disclosure or CD,
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which is your mortgage
settlement statement
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and we're getting started right now.
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(upbeat music)
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Hey, what's going on?
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I'm Emmett Dempsey mortgage broker
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and owner Treasure Coast
mortgage here in Port St. Lucie.
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And welcome to another video.
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On this channel, we're talking
talk more about mortgages,
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the home buying process,
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and some cool things around Port St. Lucie
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in the Treasure Coast.
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So if you're new here, please
think about subscribing.
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Okay, the Closing Disclosure.
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Okay we finally made it to the end
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made it through underwriting
and clear to close,
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and we're about ready to
close on your new home
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or your refinance.
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Now what is the Closing Disclosure?
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and again this is a twin
little loan estimate.
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And if you haven't watched
the loan estimate video,
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you can go back and watch that.
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It's a twin to a loan estimate
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which compares to what was
disclosed on the loan estimate
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versus what is at the end.
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And usually, it should be that
the closing disclosure fees
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are lower than what was disclosed because
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when I was over disclose on
the loan estimate initially,
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now with the closing disclosure
is the settlement statement
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that you're going to sign closing.
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You might have gotten an
initial one electronically,
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which starts your three-day wait,
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and I'm gonna go into that in a minute.
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Now the CD was part of the
TILA-RESPA Integrated Disclosures
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that were changed in 2010.
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Now one of the things that
they that they changed
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and was they eliminated the HUD-1,
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just like the Loan Estimate
eliminated a Good Faith estimate
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and the truth and lending
and combined them,
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whereas the HUD-1 is now the
Closing Disclosure or CD.
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Okay, so the CD is gonna
have your settlement charges
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what the final numbers
are, whereas your estimate
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had estimated numbers are
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and one of the pages that are on there
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is the the comparisons in LE
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and I'm going to go into a deep dive
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into the CD in a minute.
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But I wanted to point out some things
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is number one is a three day wait.
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The CFPB calls it the
consummation sentence,
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that's their words, not mine.
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So you have to wait three days
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before you consummate your mortgage.
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So I'm gonna give you an example,
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if you wanna close on a Friday,
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you got to have it done by Tuesday.
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So it's basically a three-day wait.
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So if you sell your
sign your CD on Monday,
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then you can close Thursday,
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you know, and so on and so
forth and Saturdays do count.
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So it's very important when
you're planning your closing,
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especially if you're
you're selling your house
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and buying something else,
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you're going to really sign
your CDs as fast as you can.
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And usually for all the
lenders that I broker to
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they let you sign your CD
early before a clear to close,
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so there's really not that issue.
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So what I'm going to do now is go into
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a detailed Closing disclosure,
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here we go.
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Okay, here is the simple
Closing Disclosure.
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It mentions a simple loan estimate
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that I had in my loan estimate video.
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Again, this is a fictitious loan,
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it's not real client information.
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So basically here is Closing Disclosure.
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This form is the statement
of the final loan terms
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and closing costs.
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And compare this document
with your loan estimate.
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Now here's the the payment information,
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Closing date and disbursement date.
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Now on a purchase in Florida,
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we're a wet funding state,
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we usually fund them the same
day that we signed paperwork,
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but sometimes like just sign one day
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and then you'll fund the next day,
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depending on what the
sellers and buyers are.
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But as the closing dates when
the paper works are signed
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disbursement date is when it funds.
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Who the settlement agent is,
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you know the phone number
that they associated
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the property to sell price, etc.
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Who you are the borrower,
who's the seller,
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who's the actual lender?
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Again, loan terms, you know, 30 2015,
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whatever they might be,
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purchase, fix rate, etc,
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FHA Conventional VA
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or other VA loan it from the
lender in the MIC number.
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Again, that's from the the the MERS,
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Mortgage Electronic Registration System.
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That's the (clears throat) MIC number.
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Okay.
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And again, kind of matches loan estimate,
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here's your loan amount,
can this amount increase
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after closing interest rate
principal and interest.
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Now and ask that question
if it's an adjustable rate,
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that answer will be yes,
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if it can increase loan
amount if it's a you know,
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if you know now as far as things that use
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a Closing Disclosure is very
few negative amortizing loan
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but again,
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if there is out there eventually
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they come back in the market.
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You know that question will be yes
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at least you'll be in
plain language yes or no
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will it increase yes or no.
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This loan, again had a prepayment penalty
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most FHA and conventional
loans don't have one,
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but this one for an example does have one
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I guess it's just so
you look at this column
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and don't overlook it and say yep, yes.
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One is a yes what why is it Yes,
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and here's what it looks like.
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And then below no
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Protected payments,
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again, this is a mortgage
insurance fall off scenarios
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years one through seven
months projected to habit
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and it falls off you see what
your payments will drop to
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once it falls off
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here is your escrows and again escrows
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are not controlled by
the mortgage company.
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So you can take a look at those.
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Again, here's your closing
cost and cash close.
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And now this is the closing
cost details in the sections
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match up to the Closing
Disclosure section,
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a origination that's for us as the broker
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and then the mortgage
company have a control
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over your points application
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underwriting fee things
here like your appraisal
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but it ended up being paid by others
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usually paid outside of closing.
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Your credit report.
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And again these are the final
fees on the loan estimate
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usually over disclose
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and then on the CD that they'll come down.
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Services did not shop
for basically your title.
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Fees or anything like that
and it's all just listed
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you know one by one so you can see em
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and then add up to D A plus B
plus C is your total closing
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cost your borrower paid your other costs
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like your recording fees,
your transfer taxes,
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who pays what now this over here
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that you didn't see on
the LE is a seller paid
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as you can see what seller did pay.
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in Florida they usually
pay the the deed stamps
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and the owners title
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and again now things that we don't know
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usually on the other,
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especially HOA,
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its like HOA
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However, their quarterly or
sometimes annually or monthly
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You know, so you have to kind of settle up
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because a seller isn't
responsible for the whole year,
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only for what they have.
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So you can see that they
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you know, so you have to pay
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your first month of HOA to get current,
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whatever your home inspection fee
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I guess you had to get one on this loan.
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And it shows what the real
estate commissions are
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in your title insurance is paid for.
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I want to show you this here,
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you know,
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calculating cash to close
talks about the loan estimate
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the last one that was
that was shown to you
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and you were scheduled
to do 16 cash to close
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ended up being a little bit
better like 14 cash to close.
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So that's kind of what you can compare.
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Now this is the the summary.
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Credit from the seller,
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you know, did about $80
paid by seller advanced
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because they paid the
first 15 days of that month
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so they gotta pay it back
to credit the seller back
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and usually you'll see
what's called tax-perations.
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That's big in Florida because your escrow
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will have the full amount due for taxes
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but you'll get the credit from the seller
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for the amount of time
that they own the house.
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So, a lot of times the
loans being cash to close
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can be a lot higher because it
doesn't have those perations
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as well as the accurate
adjustment for your
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you know, for that.
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(clears throat)
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So, there's that
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And then down here you have
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what is a simple demand feature.
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Again, it all matches the
Loan Estimate negative
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amortization
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partial payments,
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no, you can't make partial payments.
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And this is a throwback
to the Truth in Lending.
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You know, again, they're all
combined as part of trade.
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Escrow account
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For now, we'll have an escrow account.
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It shows you what's your
property costs over, you know,
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the one year initial payment to the escrow
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and then your monthly escrow payment.
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And then if you waive escrow,
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you know that box will be checked
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in here's your total payments.
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Again, that's a throwback
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to the Truth in Lending,
your finance charges,
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your a your APR,
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your final APR compared
to what you disclosed
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And here's a list of all
the contact information
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for the broker.
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I'm a mortgage broker.
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So my information will be here,
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and you know, the real estate
for the buyer, the seller
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and settlement agent and
the lender that we chose.
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So, and then again, this
is where you would sign
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you know most of time you e-sign
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a couple of days before closing.
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Now a lot of what we do,
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like you'll assign an initial CD
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that will be about 99% correct,
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you know, cash or close
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before it's what we call
balance with a title company.
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And then again, that's the
structure three-day wait
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that we talked about
previously in the video.
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So you backup if you have
any questions about that?
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But yeah, so you need to
have you know three days,
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you know, to before the
consummation of your mortgage.
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So just, you know, quick rule of thumb,
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you want to close on a Friday,
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you got to have it done by Tuesday.
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So usually, I take care
of that three-day wait,
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even before we're clear to close,
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but you know, you'll get your initial CD,
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and then you'll get the final CD.
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So you know, how much
cash you have to wire,
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how much cash you're getting, etc.
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So, that's in a nutshell,
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and here we go.
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Okay.
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And welcome back.
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I hope that was informative
look at the Closing Disclosure.
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You know, congratulations
on your new home loan.
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hopefully I was the one who
did have it done for you.
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But if you have any different
questions about the CD
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and other disclosures,
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definitely give me a
call dempseymortgage.com
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Thank you so much for watching
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and I'll see you in the next one.
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