What must be disclosed in the Closing Disclosure?

The correct answer focuses on the essential function of the Closing Disclosure, which is to provide a comprehensive summary of the final closing costs and loan terms. This document is designed to give borrowers a clear understanding of their financial commitments before finalizing the purchase of a home.

By comparing the final closing costs and terms to those provided in the Loan Estimate, the Closing Disclosure ensures transparency and helps the borrower see any changes that may have occurred throughout the loan process. This comparison is crucial as it allows the borrower to verify whether the terms they agreed to have been maintained, fostering informed decision-making right up to the closing of the transaction.

The other options do not encompass the broad and necessary information that the Closing Disclosure is meant to convey. Mentioning only the principal amount of the loan fails to provide the borrower with a complete picture of their financial obligations. A history of previous owners is not relevant to the transaction at closing and does not impact the borrower's financial decisions. Additionally, while knowing the seller's current mortgage rate may be of interest, it does not pertain to the borrower’s own loan details, thus making it irrelevant to the purpose of the Closing Disclosure.