What is the primary purpose of the Loan Estimate form?

The primary purpose of the Loan Estimate form is to summarize key loan features and estimated costs. This form is designed to provide borrowers with a clear and concise overview of the essential terms of a loan, allowing them to understand what they are agreeing to. It includes information such as the estimated interest rate, monthly payment, and the estimated total closing costs, helping borrowers make informed comparisons between various loan offers. The Loan Estimate enhances transparency in the lending process, making it easier for consumers to navigate their financing options.

While outlining the terms of the loan, detailing fees, and providing lender contact information are all important aspects of the mortgage process, the core function of the Loan Estimate is to give a comprehensive summary that encompasses these elements in an easily digestible format. This allows potential borrowers to have a quick reference that aids in their decision-making process regarding which loan to pursue.