ALTA Practice Exam – Complete Prep Resource

The closing disclosure is a crucial document in the real estate transaction process that provides detailed information about the closing costs associated with a mortgage loan. This document is typically given to the buyer at least three days prior to closing, allowing them to review all costs involved in the transaction.

It includes a breakdown of all fees, such as loan origination fees, title insurance, and escrow fees, along with the final closing costs. This transparency is important for buyers, ensuring they are aware of exactly what they need to pay at closing and preventing any surprises on closing day. By providing a complete view of the financial aspects related to the mortgage, the closing disclosure plays a key role in promoting informed decision-making for the buyer.

The other options focus on aspects of the transaction that are not detailed in this particular document. For instance, while the purchase price may be summarized in the closing disclosure, it is not the primary purpose of the document. A home inspection report, which is crucial to the buying process, is separate from this financial document. Similarly, while the terms of the mortgage agreement may be referenced, they are outlined in other documents, not specifically in the closing disclosure. Thus, the focus of the closing disclosure is solely on the costs associated with the mortgage loan