When a borrower applies for a mortgage, lenders are required to provide written disclosures regarding loan terms and costs. This requirement is a fundamental part of ensuring transparency and protecting consumers in the lending process. Written disclosures typically include key financial details such as the interest rate, fees, monthly payment amounts, and other closing costs. This comprehensive information helps borrowers make informed decisions about their mortgage options and understand the full financial implications of the loan they are considering.
The other options do not fulfill the regulatory requirements that lenders must adhere to. A verbal agreement on loan terms lacks the necessary documentation and clarity that written disclosures offer. Providing only the annual percentage rate (APR) would not encompass the complete financial picture, as it does not outline other critical costs and terms associated with the mortgage. An estimate of potential property value, while useful, is not a requirement at the application stage and does not provide the comprehensive disclosure necessary for borrower understanding. Therefore, the requirement for written disclosures is vital for consumer protection and informed decision-making in the mortgage lending process.