What document must be provided to a borrower within three days of applying for a mortgage?

The Loan Estimate is the document that must be provided to a borrower within three days of applying for a mortgage. This requirement is part of the regulations set by the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA) under the TILA-RESPA Integrated Disclosure (TRID) rules. The purpose of the Loan Estimate is to provide borrowers with clear, concise information about the key features, costs, and risks of the mortgage loan they are applying for.

By ensuring that borrowers receive this document early in the process, it helps them understand the financial implications of the mortgage and compare different loan offers more easily. This promotes transparency and allows borrowers to make informed decisions. The Loan Estimate includes important details such as the loan amount, interest rate, monthly payment, and an estimate of closing costs, which are essential for the borrower's budgeting process.

In contrast, while the Closing Disclosure is also important, it is provided closer to the closing date of the loan, typically three days before closing. The Truth-in-Lending Statement is a disclosure that was commonly used prior to the implementation of the Loan Estimate and Closing Disclosure and is generally considered outdated in the current lending environment. The Mortgage Commitment Letter, issued by a lender, confirms