US FederalWhat costs must be disclosed to me before closing on a home purchase?
Before closing on a home purchase, lenders must disclose all settlement costs—including lender fees, title charges, and government fees—using the Loan Estimate (within 3 days of application) and Closing Disclosure (at least 3 business days before closing), as required by federal law.
What the Law Says
The Real Estate Settlement Procedures Act (RESPA), codified in federal law, mandates transparency in home buying costs to protect consumers from unexpected or inflated charges at closing.
Under RESPA, lenders must provide two key documents: the Loan Estimate (LE) and the Closing Disclosure (CD). The LE must be delivered within three business days after a mortgage loan application is received. It itemizes estimated settlement costs, including lender charges, third-party fees (like title insurance and appraisals), and government fees.
The CD must be provided at least three business days before closing. It reflects the final, actual costs—and must match the LE closely; significant changes trigger new waiting periods. RESPA’s core purpose is to ensure borrowers can compare loan offers and understand the full cost of credit before committing.
While 12 U.S.C. § 2601 itself states Congress’s findings and purpose—not the disclosure mechanics—the statute authorizes regulations that implement these requirements (now enforced through Regulation X, implementing RESPA, and integrated with Truth in Lending Act rules under the TILA-RESPA Integrated Disclosure rule).
Statutory TextThe Congress finds that significant reforms in the real estate settlement process are needed to eliminate abusive practices in the real estate settlement process.
— 12 U.S. Code § 2601 — Congressional findings and purpose
What to Do
Review your Loan Estimate within 3 days of applying—check fees, interest rate, and projected payments.
Compare it to your Closing Disclosure at least 3 business days before closing—verify no major cost increases (e.g., lender fees up >10%, or zero-tolerance fees changed at all).
Ask your lender to explain any unclear or unexpected charges before signing.
If you receive the Closing Disclosure late or notice unexplained changes, request a new 3-day review period before closing.
Sources
Not legal advice. This article is general information based on publicly available sources, written for educational purposes. Laws change and individual situations vary. Consult a licensed attorney in your jurisdiction before acting on anything you read here. Last reviewed: 2026-06-08.