The closing disclosure is required by federal law to be delivered to the borrower at least three business days before the closing. The lender produces it. The title company finalizes it. The buyer signs it. The five pages contain every dollar of the transaction, and the line items that get padded are the same line items every transaction. Knowing what to look for before the closing day is the difference between a clean transaction and 800 to 2,400 dollars in unnecessary fees that could have been negotiated away.
Page one is the loan summary. Loan amount, interest rate, monthly principal and interest, prepayment penalty box, balloon payment box, and the projected payment schedule. The interest rate must match the lock confirmation from the rate lock email. If the lock was 6.625 and the disclosure shows 6.75, that is an error or a re lock that was not authorized. The lock confirmation overrides everything else. Push back on the rate before signing.
The prepayment penalty box should be checked no on a residential loan. Tennessee residential mortgages have not legally permitted prepayment penalties on most owner occupied loans since 2010. Investment property loans can include them and the borrower should know if the loan being signed is going to charge a fee for paying it off in the first three years. The balloon payment box should also be checked no on a 30 year fixed. If yes is checked, stop the closing.
Page two is the loan costs and other costs broken into sections A through H. Section A is origination charges. The line item to scrutinize is application fee, underwriting fee, processing fee. These are lender fees and are negotiable. A typical Nashville purchase loan in 2026 has 800 to 1,500 dollars in section A fees. Anything above 2,000 dollars warrants a phone call to the loan officer asking which fees can be waived. Discount points are listed here as well. If the buyer did not agree to buy down the rate, no discount points should appear.
Section B is services the borrower did not shop for. Appraisal fee, credit report fee, flood determination, tax service fee. The appraisal in Nashville runs 550 to 750 dollars for a single family home and 650 to 950 dollars for a duplex or quad. Anything above 800 dollars on a single family appraisal in Davidson County is a flag. The tax service fee is typically 70 to 120 dollars and is non negotiable on most loan products.
Section C is services the borrower did shop for. This is where the title insurance and the closing fee live, and it is where the savings opportunity is. Tennessee title insurance is regulated and the rate is fixed by the state, but the closing fee, the doc prep fee, and the courier fees are not regulated. Closing fees in Nashville range from 450 to 1,200 dollars across title companies. Shopping the title company is a real money saver. The lender provides a list of three to five title companies and the borrower picks one. Picking the cheapest within reason saves 300 to 700 dollars at signing.
Section D totals A plus B plus C, the loan costs.
Section E is taxes and government fees. State recording fees in Tennessee are 7 dollars for the first 5 pages of the deed and 1 dollar per additional page, plus 10 dollars per 5,000 dollars of indebtedness for the deed of trust. Transfer tax is 0.37 dollars per 100 dollars of the purchase price, paid by the buyer in Davidson County by custom. On a 470,000 dollar purchase, the transfer tax is 1,739 dollars. The recording fees and transfer tax are not negotiable. The numbers should match the math.
Section F is prepaids. Homeowner's insurance for the first year, mortgage insurance for the first month, prepaid interest from the closing date to the end of the month, property tax escrow if applicable. Prepaid interest is per diem and is calculated on the loan amount times the rate divided by 365 times the days remaining in the month. A closing on the 25th means six days of prepaid interest. A closing on the 5th means 26 days. Closing later in the month reduces this line item.
Section G is initial escrow at closing. Three to four months of property tax and one to two months of homeowner's insurance go into the escrow account at closing. On a 470,000 dollar Davidson County home with a 4,200 dollar tax bill and a 1,650 dollar insurance bill, the initial escrow runs 1,500 to 2,200 dollars. The escrow money is the buyer's money sitting in an account managed by the lender. It is not lost.
Section H is other. Owner's title insurance, home inspection, HOA dues, survey, transfer fees. The owner's title insurance is optional but cheap on a piggyback issued at the same time as the lender's policy. In Davidson County the owner's policy on a 470,000 dollar home is roughly 1,150 dollars. Skip it and the buyer has no protection against title defects. The line item is worth the cost.
Page three is the calculation of cash to close, side by side with the original loan estimate. Any line item that increased between the loan estimate and the closing disclosure should be questioned in writing 24 hours before closing. The lender is required to justify the change. Federal regulations limit how much certain fees can change between the estimate and the disclosure, and disputes get resolved before signing or not at all.
Pages four and five are the loan terms in detail and the contact information. Verify the names. Verify the property address. Verify the closing date. The signature on page five is binding. Reading the disclosure on day one of the three day window leaves time to fix problems. Reading it the morning of leaves no time at all.
