Which key information must lenders provide to borrowers after receiving a loan application?

The Loan Estimate is a crucial document that lenders are required to provide to borrowers shortly after receiving a loan application. This form is designed to help borrowers understand the key features, costs, and risks of the mortgage loan for which they are applying. It includes important information such as the estimated interest rate, monthly payment amounts, and the estimated closing costs, allowing borrowers to make informed decisions about their loan options.

Providing the Loan Estimate within three business days of receiving the application aligns with regulations set by the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). This regulation ensures transparency in the lending process, helping to promote consumer protection and informed decision-making.

In comparison, while closing disclosures, settlement statements, and tax return copies are important documents in the loan and mortgage process, they do not meet the specific requirement of being provided right after the loan application is submitted. The closing disclosure is typically delivered closer to the closing date, the settlement statement is often provided at the time of closing, and tax return copies are not mandated disclosures at the application stage.