When is a lender required to provide the Loan Estimate after receiving a loan application?

A lender is required to provide the Loan Estimate within three business days after receiving a loan application. This requirement is part of the Truth in Lending Act, specifically designed to ensure that consumers are given essential information about the terms of their mortgage loan in a timely manner. The Loan Estimate outlines important details such as the estimated monthly payment, the interest rate, and closing costs, allowing borrowers to make informed decisions and compare different loan offers effectively.

Three business days is calculated excluding weekends and federal holidays, which emphasizes the importance of prompt disclosure within the lending process to protect the consumer. This regulation helps facilitate transparency and encourages better financial practices, allowing borrowers to be aware of the obligations they undertake when committing to a mortgage.

The other time frames mentioned, like five business days or five calendar days, do not align with the regulatory requirements set out under Truth in Lending, emphasizing the importance of understanding the specific legal frameworks governing lending practices.