What event occurs before the loan can consummate in relation to the Closing Disclosure?

The delivery of the Closing Disclosure is a critical step that must occur before the loan can consummate. The Closing Disclosure provides borrowers with important information about the costs associated with the mortgage, including the loan terms, monthly payments, and closing costs. By law, the borrower must receive this document at least three business days prior to the closing of the loan to ensure they have adequate time to review and understand the terms of the loan they are about to enter into.

This requirement under the Truth in Lending Act and the Real Estate Settlement Procedures Act is designed to promote transparency and allow borrowers to compare offers from different lenders. The three-day waiting period also gives borrowers an opportunity to ask questions or even resolve any discrepancies in the information provided before finalizing the loan agreement. This review period is paramount to ensuring that consumers are making informed decisions about their financing options.

While the final inspection of the property, signatures on loan documents, and full payment of the down payment are all important to the overall process, they take place after the Closing Disclosure has been delivered and reviewed by the borrower. Hence, the correct answer centers on the importance of the Closing Disclosure in the loan consummation process.