What is one requirement of the Closing Disclosure?

The requirement that the Closing Disclosure must detail loan terms and itemized costs is fundamental for ensuring that borrowers receive a clear understanding of their mortgage transactions. This document is designed to provide transparency by breaking down all the fees and expenses associated with closing a mortgage loan, including principal and interest, monthly payment amounts, and any closing costs. With this detailed breakdown, borrowers can make informed decisions, compare different loan offers, and understand how much they will owe at closing and over the life of the loan. This promotes consumer protection and informed consent in the mortgage lending process, which is one of the key goals of federal regulations surrounding mortgage disclosures.

Other options that involve signing by the borrower, estimating future property values, or including the borrower's credit history are not requirements of the Closing Disclosure. While there are related documents and processes involving signatures and credit histories in the mortgage process, they do not fall under the specific mandates for what must be included in the Closing Disclosure.