What is the primary purpose of the Loan Estimate?

The primary purpose of the Loan Estimate is to disclose the terms and conditions of the loan. This document is designed to give borrowers a clear overview of the key details related to their mortgage, including the loan amount, interest rate, estimated monthly payments, and closing costs. It helps borrowers understand the financial implications of their mortgage before committing to the loan, allowing for informed decision-making.

The Loan Estimate is a crucial tool because it fosters transparency and enables comparisons between different loan offers. This helps potential homeowners ensure they are selecting the best mortgage product for their financial situation.

In contrast, other options do not capture the main function of the Loan Estimate. While providing detailed loan history might be useful, it is not the focus of this document. Notifying the lender of the borrower's intent is related to other aspects of the borrowing process but does not describe the purpose of the Loan Estimate. Summarizing borrower financial aid options does not pertain to the specifics of the loan itself, further distinguishing the Loan Estimate's primary focus on loan terms and conditions.