What is one key component that must be included in a loan estimate?

A loan estimate includes essential information that helps borrowers understand the terms and costs associated with a mortgage. One of the crucial components is an estimate of the total closing costs. This figure provides borrowers with a clear idea of the expenses they can expect to incur when completing the loan transaction, which may include fees for appraisals, title services, and other related costs.

Providing an estimate of closing costs is mandated by the Truth in Lending Act and the Real Estate Settlement Procedures Act, ensuring that consumers have transparency about what they will need to pay.

Other options do not align with the basic requirements of a loan estimate; for instance, the borrower's job history, while relevant to the overall mortgage application process, is not required to be disclosed in the loan estimate. A guarantee of loan approval cannot be included, as loan decisions are contingent on various factors, and down payment assistance program listings are also not a standard component of the loan estimate.