## Initial Disclosures in Mortgage Lending
### Introduction
When you apply for a mortgage, the lender is required to provide you with certain disclosures that explain the terms of the loan and your rights as a borrower. These disclosures are intended to help you understand the loan process and make informed decisions about your mortgage.
The initial disclosures that you will receive from your lender include:
* **Loan Estimate:** This document provides a summary of the loan terms, including the interest rate, loan amount, monthly payment, and closing costs.
* **Truth-in-Lending Disclosure:** This document provides information about the loan’s interest rate, fees, and other charges.
* **Good Faith Estimate:** This document estimates the closing costs that you will be responsible for paying at the closing of your loan.
### Loan Estimate
The Loan Estimate is a three-page document that provides a summary of the key terms of your loan. This document includes the following information:
* **Loan amount:** The amount of money that you are borrowing.
* **Interest rate:** The annual percentage rate (APR) that you will be paying on the loan.
* **Monthly payment:** The amount that you will be paying each month on the loan.
* **Loan term:** The number of years that you will be paying on the loan.
* **Closing costs:** The estimated fees that you will be responsible for paying at the closing of your loan.
The Loan Estimate is not a binding agreement, but it is a good faith estimate of the costs that you can expect to pay. The actual costs of your loan may vary slightly from the estimates provided in the Loan Estimate.
### Truth-in-Lending Disclosure
The Truth-in-Lending Disclosure is a two-page document that provides detailed information about the loan’s interest rate, fees, and other charges. This document includes the following information:
* **Annual percentage rate (APR):** The annual percentage rate is the cost of the loan expressed as a yearly rate. The APR includes the interest rate, as well as any fees or other charges that are included in the loan.
* **Finance charge:** The finance charge is the total amount of interest and fees that you will pay over the life of the loan.
* **Total amount of payments:** The total amount of payments is the total amount of money that you will pay on the loan, including the principal, interest, and fees.
The Truth-in-Lending Disclosure is a legally binding document. The lender is required to provide you with this document before you sign the loan agreement.
### Good Faith Estimate
The Good Faith Estimate is a one-page document that estimates the closing costs that you will be responsible for paying at the closing of your loan. This document includes the following information:
* **Origination fee:** The origination fee is a fee that the lender charges for processing your loan application.
* **Discount points:** Discount points are fees that you can pay to reduce the interest rate on your loan.
* **Title insurance:** Title insurance protects you from any claims against the ownership of your home.
* **Appraisal fee:** The appraisal fee is a fee that the lender charges to have your home appraised.
* **Other closing costs:** Other closing costs may include attorney fees, recording fees, and transfer taxes.
The Good Faith Estimate is not a binding agreement, but it is a good faith estimate of the costs that you can expect to pay at closing. The actual costs of your closing may vary slightly from the estimates provided in the Good Faith Estimate.
### Review Your Disclosures Carefully
It is important to review your initial disclosures carefully before you sign the loan agreement. These disclosures contain important information about the terms of your loan and your rights as a borrower. If you have any questions about the disclosures, you should contact your lender for clarification.
### Additional Resources
* [Consumer Financial Protection Bureau: Initial Disclosures for Mortgages](https://www.consumerfinance.gov/ask-cfpb/what-are-initial-disclosures-for-mortgages-en-1298/)
* [Federal Trade Commission: Mortgage Disclosures](https://www.ftc.gov/tips-advice/business-center/guidance/mortgage-disclosures)
* [National Association of Realtors: Mortgage Disclosures](https://www.nar.realtor/topics/mortgage-disclosures)