Finance
What is the significance of RESPA's Good Faith Estimate (now replaced by the Loan Estimate) for Pennsylvania homebuyers?
AIt is the final calculation of all closing costs provided exactly 3 days before closing
BIt provides buyers with an early estimate of loan terms and closing costs within 3 business days of a loan application, allowing comparison shopping✓ Correct
CIt is a Pennsylvania-specific form required by PREC for all mortgage transactions
DIt guarantees that the borrower's actual closing costs will not exceed the estimate by any amount
Explanation
The Loan Estimate (LE), which replaced the Good Faith Estimate under TRID regulations, must be provided to mortgage applicants within 3 business days of a completed loan application. It discloses projected loan terms (rate, monthly payment, loan amount) and estimated closing costs in a standardized format that allows buyers to comparison shop among lenders. TRID rules limit certain closing cost increases between the LE and the final Closing Disclosure, protecting Pennsylvania buyers from unexpected last-minute cost increases.
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