Process Flashcards

What is the purpose of a Loan Estimate (LE) in the mortgage process?

Answer: To provide a standardized summary of loan terms, projected payments, and closing costs

A Loan Estimate is a three-page form lenders must provide within three business days of receiving a loan application, summarizing key loan terms and estimated costs.

How long does a lender typically have to provide a Loan Estimate after receiving a completed application?

Answer: 3 business days

Under TRID rules, lenders must deliver the Loan Estimate within three business days of receiving a completed loan application.

What triggers the three-day waiting period before a mortgage can close under TRID rules?

Answer: Delivery of the Closing Disclosure

Borrowers must receive the Closing Disclosure at least three business days before consummation to review final loan terms.

Which step in the mortgage process involves verifying that a property's title is free of liens or legal encumbrances?

Answer: Title search

A title search examines public records to confirm the seller has clear ownership and to identify any outstanding liens, easements, or claims.

What does 'rate lock' mean in the mortgage process?

Answer: The lender guarantees a specific interest rate for a defined period

A rate lock is a lender's commitment to honor a quoted interest rate for a set period, protecting the borrower from rate increases before closing.

What is the role of a mortgage underwriter?

Answer: To assess whether the borrower and property meet the lender's criteria for loan approval

An underwriter evaluates the borrower's creditworthiness, income, assets, and the property's value to decide whether to approve, suspend, or deny the loan.

Which document formally transfers ownership of a property from the seller to the buyer at closing?

Answer: Warranty deed

A warranty deed conveys title from seller to buyer and includes the seller's guarantee that the title is clear of undisclosed encumbrances.