Which document must borrowers receive after their loan application is submitted?

The correct answer is the Loan Estimate, which borrowers must receive after submitting their loan application. This document is critical because it provides a clear and standardized summary of the loan terms, projected payments, and closing costs the borrower can expect. The Loan Estimate is designed to help borrowers compare different loan offers and make informed decisions during the mortgage application process.

The importance of the Loan Estimate lies in its requirement under the Truth in Lending Act and the Real Estate Settlement Procedures Act, which mandates that lenders provide this document within three business days of receiving a loan application. This ensures that borrowers have the necessary information to understand the financial implications of their loan and to shop around effectively.

Other documents, such as the Closing Disclosure, the Loan Approval Letter, and the Final Loan Agreement, are provided at later stages in the mortgage process and serve different purposes. The Closing Disclosure, for example, is provided closer to the actual closing of the loan and details the final terms and costs. The Loan Approval Letter is a statement that indicates the lender's willingness to loan based on the borrower's application but is not necessarily required immediately after the application submission. The Final Loan Agreement is the document that finalizes the terms of the loan after all conditions are satisfied. Therefore, the Loan Estimate is the