Which document must a borrower receive outlining costs and fees they are likely to incur?

The document that a borrower must receive, outlining the costs and fees they are likely to incur, is the Loan Estimate. This crucial document is provided to borrowers within three business days of their mortgage application and includes a detailed breakdown of the estimated closing costs, interest rate, monthly payments, and other important information related to the loan. This ensures that borrowers have a clear understanding of the financial implications of their loan prior to proceeding further, allowing them to make informed decisions.

The Loan Estimate is designed to promote transparency in the lending process, enabling borrowers to compare offers from different lenders effectively. It's an essential tool in safeguarding the interests of borrowers by giving them upfront knowledge of the potential costs involved in securing a mortgage, which is vital in budgeting and financial planning.

The Closing Disclosure, while also important, is typically provided later in the process, specifically three business days before closing, and it contains final details about the mortgage loan, including the exact terms and costs. The Property Title pertains to the ownership of the property and establishes legal ownership, while the Mortgage Agreement is the actual contract that outlines the terms of the loan, signed by the borrower and the lender at the closing. These documents serve different purposes and are not specifically designed to inform borrowers about anticipated costs and fees at