When must a borrower receive the Closing Disclosure?

A borrower must receive the Closing Disclosure at least three business days before the closing of the mortgage loan. This requirement is established under the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA), which mandate that borrowers have sufficient time to review the terms of their loan.

Providing the Closing Disclosure three business days prior to closing allows the borrower to thoroughly understand the financial terms, costs associated with the loan, and any potential discrepancies between the Loan Estimate and the final terms. This advance notice is crucial for informed decision-making and helps prevent any last-minute surprises during the finalization of the mortgage.

Receiving the disclosure immediately after applying for the loan, at the closing itself, or within one week after closing does not fulfill the regulatory requirements designed to protect borrowers and ensure transparency in the lending process. Thus, the three-business-day rule is an essential part of the mortgage process in Colorado and across the United States.