Finance
Under RESPA (Real Estate Settlement Procedures Act), a lender must provide the buyer with a Loan Estimate within:
A1 business day of loan application
B3 business days of receiving a completed loan application✓ Correct
C5 business days of loan application
D10 days of loan pre-approval
Explanation
RESPA requires lenders to provide the borrower with a Loan Estimate within 3 business days of receiving a completed mortgage loan application. The Loan Estimate discloses estimated loan terms, projected payments, and closing costs.
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Key Terms to Know
Pre-Approval
A lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
Closing CostsFees 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.
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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