Real Estate Glossary

What is Closing Disclosure (CD - formerly HUD-1)?

A Closing Disclosure (CD) is a document that is provided to the buyer and seller in a real estate transaction that outlines the final terms of the sale, including the purchase price, the closing costs, and the distribution of funds. The closing disclosure, which was formerly known as the HUD-1, is required by law to be provided to the parties at least three business days before the closing of the sale. The purpose of the closing disclosure is to ensure that the parties have a clear understanding of the terms of the sale and the costs that are associated with it, and to help prevent last-minute surprises or misunderstandings. The closing disclosure includes a detailed breakdown of the purchase price and the closing costs, as well as any credits or adjustments that are applied to the transaction. It also includes information about the financing of the sale, such as the mortgage loan terms and any mortgage insurance premiums that are required. The closing disclosure is an important document that buyers and sellers should review carefully before closing on a property.