If one of the service providers charges more than the guaranteed amount on the Loan Estimate, who pays the difference?

When a service provider charges more than the amount listed in the Loan Estimate, the lender is responsible for covering the difference. This is a crucial aspect of the Truth in Lending Act (Regulation Z), which aims to ensure transparency and protect consumers during the loan process.

The borrower relies on the Loan Estimate to gauge the total cost of the loan, including the fees for services. If the actual charge exceeds what was previously guaranteed, the lender must absorb the additional cost to maintain the integrity of the estimate provided to the borrower. This rule is intended to protect consumers from unexpected increases in their loan costs and ensures that lenders are held accountable for the information they provide at the start of the loan process.

By mandating that lenders cover any discrepancies in charges, the regulation fosters trust and encourages lenders to accurately estimate costs, making the loan process more transparent.