Which disclosure informs borrowers about total settlement charges?

The Closing Disclosure is the correct answer because it is specifically designed to provide borrowers with a comprehensive breakdown of all the costs associated with their mortgage transaction, including total settlement charges. This document outlines the final terms of the loan, including the loan amount, interest rate, monthly payment, and the total cost of closing the loan, giving borrowers a clear understanding of what they will owe at the closing table.

The Closing Disclosure must be provided to the borrower at least three business days before closing. This timing allows borrowers to review the charges, ensuring they have sufficient time to ask questions or voice any concerns regarding the fees listed. The detailed nature of this disclosure is in line with the requirements set forth by the Consumer Financial Protection Bureau (CFPB), which aims to promote transparency and protect consumers during the homebuying process.

Other options, while relevant in the mortgage process, do not serve the specific purpose of summarizing total settlement charges in the same way. The Loan Estimate provides an estimate of costs at the outset of the mortgage process but is not finalized. The Truth-in-Lending Disclosure focuses on the cost of borrowing and key loan terms but does not address specific settlement charges. Lastly, the Financial Disclosure Statement is not an established term in the context of mortgage lending,