What does a Loan Estimate provide to the borrower?

A Loan Estimate is a vital document intended to give borrowers a clear understanding of the costs associated with their mortgage. It primarily outlines projected closing costs and the monthly payments the borrower will need to make. This information is essential for borrowers as it helps them compare different loan offers and make informed decisions.

The Loan Estimate includes details such as the loan amount, interest rate, and the estimated monthly payment, along with an itemization of closing costs including loan origination fees, title insurance, and other costs associated with the loan process. By providing a standardized format for this information, the Loan Estimate aims to create transparency and help borrowers easily understand their financial obligations before the closing of the loan.

While the other options may contain relevant information related to the mortgage process, they do not encompass the comprehensive summary of costs and payments that the Loan Estimate is designed to provide.