Question 19

The lender must provide the loan applicant with a Loan Estimate within 3 business days of application.

Lenders are required to give a Loan Estimate to loan applicants within three business days of receiving a mortgage application. This requirement helps consumers understand the costs associated with their mortgage before closing.

A) within 3 business days of application

This option is correct because federal regulations mandate that lenders must provide a Loan Estimate to applicants within three business days of receiving the application. This ensures that borrowers have early access to important cost information, allowing them to make informed decisions.

B) at least 48 hours prior to closing

This option is incorrect as it misrepresents the timing of when the Loan Estimate must be provided. The law specifically requires the Loan Estimate to be given within three business days of the application, not just before closing.

C) upon mortgage approval

This option is also incorrect. A Loan Estimate must be issued much earlier in the process, specifically within three business days of the application, rather than waiting for the approval stage.

D) upon the issuance of a pre-approval letter

This choice is incorrect as well. The Loan Estimate is not linked to the issuance of a pre-approval letter; it is required much earlier, within three business days after the application is submitted.

Conclusion

The requirement for lenders to provide a Loan Estimate within three business days of the application is crucial for consumer protection and financial transparency. Options B, C, and D misstate the timing of when the Loan Estimate is due, reinforcing that option A is the only accurate choice in this context.