Which statement is true regarding loan estimates in New Jersey?

The assertion that loan estimates must include all potential fees and interest rates is correct because the purpose of a loan estimate is to provide borrowers with a clear, detailed breakdown of the costs they will incur when obtaining a mortgage. Under the regulations, particularly those set forth by the Consumer Financial Protection Bureau (CFPB), a loan estimate must disclose not only the estimated interest rate but also various fees including closing costs, points, and other charges. This comprehensive disclosure is intended to empower consumers by helping them understand the total cost of the loan and enabling them to compare different loan offers accurately.

In contrast, providing estimates verbally is not permissible as it undermines the clarity and reliability of written documentation, which is crucial for informed decision-making. Delaying the provision of loan estimates until after closing would also violate regulatory requirements meant to ensure transparency well before any contractual commitment is made. Finally, loan estimates are mandatory for lenders under federal law, making them an essential part of the mortgage lending process, rather than an optional element.