How long before closing must the Closing Disclosure be provided?

• A. At least one business day prior to closing
• B. At least two business days prior to closing
• C. At least three business days prior to closing
• D. At least five business days prior to closing

Answer: (C)

The Closing Disclosure must be provided to the borrower at least three business days prior to the closing. This requirement is established by the TILA-RESPA Integrated Disclosure (TRID) rule, which aims to give borrowers sufficient time to review the final terms and costs of the loan before they are legally obligated to proceed.

This three-day period allows the borrower to compare the Closing Disclosure with the Loan Estimate they received earlier in the process. The goal is to ensure borrowers fully understand their financial obligations and can ask any questions or address any concerns before closing. This time frame is particularly important because it helps promote transparency and reduce the likelihood of last-minute surprises at the closing table, enhancing borrower protection and awareness in the mortgage process.

By adhering to this regulation, lenders can foster trust and ensure compliance with federal laws governing the lending process, which ultimately benefits both the lender and the borrower in creating a smoother transaction.