What does the Loan Estimate (LE) disclose?

The Loan Estimate (LE) is a crucial document that provides borrowers with clear and concise information about the costs associated with their mortgage loan. This includes details such as the interest rate, monthly payments, and any closing costs that the borrower will incur. By disclosing these associated costs up front, the LE allows borrowers to understand their financial commitments and compare different loan offers effectively. This transparency is integral to ensuring that borrowers can make informed decisions about their mortgage options.

While aspects like the terms of the property sale, existing encumbrances, and property tax obligations are important, the primary purpose of the Loan Estimate is to focus specifically on the financial costs related to the mortgage itself. This is why the disclosure of associated costs, such as loan origination fees, points, and other expenses tied to securing the mortgage, is so essential. It's designed to protect consumers by ensuring they have all relevant financial information when considering a loan.