What is the purpose of the Loan Estimate provided to borrowers?

The Loan Estimate serves a crucial role in the mortgage process by summarizing key loan features, terms, and estimated costs associated with a mortgage loan. This document is designed to provide borrowers with clear and concise information about what they can expect in terms of the financial obligations tied to the loan. This includes the loan amount, interest rate, monthly payments, and closing costs, among other important details.

By offering a standardized format, the Loan Estimate helps borrowers compare different loan offers from various lenders more easily, enabling informed decision-making. It is provided within three business days of receiving a loan application, ensuring that the borrower has timely information to consider as they move forward in the mortgage process. This transparency ultimately empowers borrowers with the necessary information to assess whether the proposed loan terms are suitable for their financial situation.