Understanding Lone Estimate Forms
The Loan Estimate must be provided to consumers no later than ____?
3 business days after they submit a loan application.
Your buyer client, Sue's, offer is finalizing a loan and she has some questions about the disclosures she received from her lender. She asks you for advice. Which of these responses to Sue's questions would you use?
"I can't advise you about those forms, other than to say you should ask your lender if you have questions."
Because the buyer traditionally pays for this, page three of the Loan Estimate includes information about a consumer's right to receive a copy of the ______ from the lender.
Appraisal
Which of the following is NOT part of the assumptions section of the Loan Estimate?
Comparisons
Cassie is helping her buyer client, Gus. As they discuss preparations for closing, she cautions Gus, "Make sure you review the Closing Disclosure as soon as you receive it and ______."
Contact your lender immediately if you find errors or have any questions
Closing costs are itemized on page two of the Closing Disclosure, and all amounts are ______.
Listed according to who paid them: the borrower, seller, or other
Kendra is purchasing a home and is ready to find a lender who will give her terms that she can afford. What lender-issued document can she use to compare loans and find the one that will best meet her needs?
Loan Estimate
Maria is a borrower reviewing her Closing Disclosure. She notices a section under "Other Costs" with a number of fees that were not shown on her Loan Estimate, such as the commissions to the real estate brokers and the home inspection fee. Should Maria contact her lender about this issue?
No, these are costs that are part of the total cost to close but aren't part of obtaining the loan, so they weren't required to be on the Loan Estimate.
Betty is purchasing a home and has received Loan Estimates from three lenders. As she compares the terms of the loans being offered, where can she find the section that allows her to make comparisons between loans with different interest rates?
Page three
Kendra has applied for a loan from Acme Savings and Loan, but when she compares the Loan Estimate the loan officer gave her with the one from Best Bank, where she also applied for a loan, she decides she'd rather go with the loan from Best Bank. Which of the following is a true statement about this situation?
The Loan Estimate expires in 10 business days if Kendra doesn't tell Acme Savings and Loan that she wants to move forward with it.
Page four of the Closing Disclosure lists specific disclosures about the loan, such as the penalty for late payments, whether a demand feature applies, whether the loan can be assumed, and ______.
The use of an escrow account
When consumers receive the Loan Estimate from a lender, what four main tasks they should perform on page one?
Check personal information for accuracy Make sure they understand loan terms Ensure closing costs are affordable Ensure projected payments are affordable
Page one of the Loan Estimate includes a section called "Costs at Closing." The amount shown as estimated cash to close is ______.
The estimated amount the client will pay by cashier's check or wire transfer at closing
Borrowers Ava and Liam are expecting their first child and want to be sure they're both comfortable with the monthly payments they'll be responsible for in the new house. Under the "Projected Payments" section of their Loan Estimate, Ava and Liam can review ______.
The estimated breakdown of each monthly mortgage payment, including any items that will be included in escrow
Both of these are found under the Calculation section.
cash to close from the borrower cash to seller
Which of these situations would require the lender to provide a revised Loan Estimate? Select all that apply.
- When the loan changes from a fixed-rate to an adjustable-rate product - When there's a change in the amount the borrower will pay as down payment - When the interest rate on the loan changes - When the lender can't verify the borrower's income - When an appraisal that comes in at less than the sale price of the home.
Ed is a homebuyer reviewing the Loan Estimate he received from a lender. He notices the loan terms include a prepayment penalty. Because he's a savvy consumer, he ______.
Asks the lender if there are other options available that would not involve a prepayment penalty
Which of the following may cause the Loan Estimate to be revised?
Interest rate change, switch to fixed-rate loan, down payment amount change, and property appraisal reveals increase in value
The section on the Loan Estimate called "Services You Cannot Shop For" includes fees for services ______.
Performed by a third party that the lender selects
Cassie is helping her buyer client, Gus, prepare for closing. What should she encourage him to verify as soon as he receives the form?
That the borrower and seller names, the property address, and the sales price are accurate and spelled correctly
Which of these charges should you expect to see itemized on page two of the Closing Disclosure?
Loan application fee Real estate broker commission Recording fees
Zara is reviewing the "Calculating Cash to Close" table on page three of the Closing Disclosure to see what has changed from her Loan Estimate. She found this extremely helpful and easy to understand because the table explicitly lists _______.
Loan estimate and final amounts side-by-side
Natalie and Sam are reviewing the Loan Estimate form to ensure the date, their names, the property address, and sales price is listed accurately. Additionally, the information provided about their loan term, purpose, product, type, and rate lock should ______.
Match what the lender discussed with both of them
Under the "Projected Payments" section of the Loan Estimate, the consumer can view what is included in the monthly payment. Which of the following may be part of the total payment other than the principal and interest?
Mortgage insurance
On the Loan Estimate under "Loan Costs," the points, application fee, and underwriting fee are considered ______.
Origination charges
Loan Estimate and the Closing Disclosure forms
Required by TILA and RESPA.
The ______ table discloses the amounts associated with the transaction that the seller will pay and receive, usually resulting in a total cash to seller.
Seller's Transaction
Under the Loan Terms block, clients should check each line and make sure it matches their understanding of their loan.
The loan amount plus the down payment should equal the sale price of the home.
What happens if 10 business days have passed with no intent to proceed from the consumer?
the Loan Estimate will simply expire. If the consumer then wants to pursue the loan, a new loan application is required, prompting a new Loan Estimate. The previous Loan Estimate isn't revised.
the basic purpose of the consumer's review of page one of the Loan Estimate:
to ensure accuracy and understanding, and evaluate the affordability of cost estimates.
What information will the consumer find on page one of the Loan Estimate?
- Sale price of property - Interest rate on the loan - Estimated cash to close - Property address - Loan product and term - Loan amount
Identify which of these items are part of page five of the Closing Disclosure
Consumer's right to a copy of the appraisal from the lender Total interest percentage amount
What information is included on the Loan Estimate form so that the consumer can confirm the reputation of lending institution and individual?
Nationwide Mortgage Licensing System IDs
Page four of the Closing Disclosure includes consumer education about ______.
The use of an escrow account
Kendra has applied for a mortgage from Best Bank. When is Best Bank required to provide Kendra with a Loan Estimate?
Three business days
Calculated Cash to Close
indicates any credits, including seller and lender credits.
