Which document must a lender provide to borrowers within three business days of applying for a mortgage?

• A. Closing Disclosure
• B. Loan Estimate
• C. Mortgage Application
• D. Pre-Approval Letter

Answer: (B)

The correct response is that a lender must provide the Loan Estimate to borrowers within three business days of applying for a mortgage. This requirement is set forth by the TILA-RESPA Integrated Disclosure (TRID) rule, which aims to enhance transparency in the mortgage process.

The Loan Estimate includes essential information about the loan terms, projected payments, and estimated closing costs, allowing borrowers to understand the financial implications of their mortgage options. This early disclosure is crucial for enabling borrowers to compare different loan offers and make informed decisions about their financing.

Other documents, while important in the mortgage process, do not have the same timeline requirement. The Closing Disclosure is provided at least three business days before closing, the Mortgage Application is the initial document submitted by the borrower, and the Pre-Approval Letter is typically generated based on the lender's review of the borrower’s financial information. However, none of these documents have the same immediate disclosure timeline as the Loan Estimate.