Closing Disclosure vs. Loan Estimate: what's allowed to change
By Francisco Williams, CCIM · CCIM · Mortgage Loan Originator NMLS #1858674 · CA DRE #01979442 · Updated
Short answer
You receive the Closing Disclosure at least three business days before closing. Some costs can't increase from the Loan Estimate at all, some can rise up to 10% in total, and some can change without limit. A new three-day wait is required if the APR becomes inaccurate, the loan product changes, or a prepayment penalty is added.
Why compare them
The Loan Estimate is a promise with limits. The Closing Disclosure is the final version. Federal rules (TRID) put each fee into a tolerance bucket, so you can tell whether an increase is allowed.
The three tolerance buckets
The table shows which fees fall where. If a zero- or 10%-tolerance fee went over its limit, the lender must refund the excess (a tolerance cure), often as a credit at closing.
| Bucket | Examples | How much can increase |
|---|---|---|
| Zero tolerance | Lender's origination charges, points, transfer taxes, services you couldn't shop for | Nothing (absent a valid change of circumstance) |
| 10% cumulative | Recording fees; services you could shop for when you used the lender's list | Up to 10% in total across the bucket |
| No limit | Prepaid interest, homeowner's insurance, escrow deposits, services from providers you chose yourself | Any amount, if disclosed in good faith |
Simplified from 12 CFR 1026.19(e)(3). Valid changed circumstances can reset tolerances.
The three-day rules
The Closing Disclosure must be received at least three business days before consummation. A new three-day period is triggered if the APR becomes inaccurate beyond the allowed tolerance, the loan product changes (for example, fixed to adjustable), or a prepayment penalty is added. Other changes don't restart the clock but still must be disclosed.
How to check yours
Line up page 2 of each document. Mark every fee that rose. Look up its bucket. Ask your loan officer about anything over its limit, in writing.
Next step
Francisco's requested documents list shows what to have ready so there are fewer changes late in the file.
Frequently asked questions
How many days before closing do I get the Closing Disclosure?
At least three business days before consummation.
Can closing costs go up after the Loan Estimate?
Some can, within tolerance limits; lender fees generally can't without a valid changed circumstance.
What happens if a fee exceeds tolerance?
The lender must refund the excess, usually as a credit at or after closing.
Sources
How to read a Loan Estimate, page by page
Where to look on the three-page Loan Estimate to compare two lenders fairly: loan terms, closing costs and the comparisons box.
Buyer readiness checklist: the 90 days before you apply
A three-month checklist for Southern California buyers: credit, savings, documents and the decisions to make before talking to a lender.