Finance
Under RESPA, a Loan Estimate must be provided to the borrower within:
A1 business day of application
B3 business days of receiving a loan application✓ Correct
C5 business days of loan application
D7 calendar days before closing
Explanation
RESPA requires lenders to provide a Loan Estimate within 3 business days of receiving a completed loan application. It discloses key loan terms and estimated closing costs.
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Key Terms to Know
Closing Costs
Fees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Math Concepts
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