What document does a lender provide within three days of loan application to disclose loan terms?

A lender is required to provide a Loan Estimate within three business days of a loan application. This document outlines the key terms of the loan, including the estimated interest rate, monthly payment, and total closing costs, among other important details. The purpose of the Loan Estimate is to help potential borrowers understand the costs associated with their mortgage loan and compare offers from different lenders.

Providing this information in a standardized format ensures that borrowers can make informed financial decisions when choosing a loan, facilitating transparency in the lending process. It is crucial for borrowers to review this document promptly, as it allows them to assess whether the terms meet their needs before proceeding further in the mortgage process. The Loan Estimate is part of the requirements established by the Truth in Lending Act and the Real Estate Settlement Procedures Act, aimed at protecting consumers in the borrowing process.