The lender discloses the pre-payment penalty on which of the following documents?

The pre-payment penalty is a fee that a borrower may incur for paying off their mortgage early. It is an important aspect of the loan terms, and disclosure of such penalties is required to ensure that borrowers fully understand the costs associated with their loan.

The loan estimate is a crucial document provided to borrowers that outlines the key features, costs, and risks of a mortgage loan. It includes important financial information, like the interest rate, monthly payments, and closing costs, as well as any pre-payment penalties that may apply. This allows borrowers to clearly see the penalty terms before committing to the loan, ensuring transparency and informed decision-making.

In contrast, the other documents listed do not typically serve this purpose. The 1003, or Uniform Residential Loan Application, primarily collects borrower information but does not detail the specific terms of the loan, including pre-payment penalties. The ECOA disclosure relates primarily to equal credit opportunity and fairness in lending rather than specific loan terms. While the trust deed and trust deed note may have some reference to penalties, they are not the primary documents designed to summarize loan costs for the borrower in an accessible manner.

Therefore, the loan estimate is the correct document where pre-payment penalties are disclosed, as it provides a comprehensive overview of loan terms