What should be included in the Loan Estimate regarding mortgage insurance?

In the context of the Loan Estimate, it is essential to include the specific cost of mortgage insurance because this provides borrowers with a clear understanding of their financial obligations. Mortgage insurance can significantly impact the overall cost of a mortgage, especially if they are making a down payment of less than 20%, which typically requires such insurance. By disclosing the specific cost, lenders ensure that borrowers can accurately assess their budgeting for monthly payments and understand the total cost of their mortgage over time.

The Loan Estimate is designed to provide a detailed breakdown of the costs associated with the loan, making it easier for consumers to compare different mortgage options. This transparency helps borrowers make informed decisions and avoid any surprises when it comes to their financial commitments. Including details like the specific cost of mortgage insurance aligns with the goal of clear and comprehensive disclosure required under Regulation Z.