Which of the following documents is designed to help borrowers compare loan options?

Which of the following documents is designed to help borrowers compare loan options?

• A. Settlement booklet
• B. Good Faith Estimate
• C. Loan Closing Statement
• D. Servicing Disclosure

Answer: (B)

The Good Faith Estimate is designed to assist borrowers in comparing different loan options by providing them with details about the costs associated with a mortgage. This document outlines the estimated closing costs, loan terms, and any other fees associated with the mortgage process, allowing borrowers to see and evaluate the financial aspects of various loans side by side. By having a clear view of these costs and terms, borrowers can make more informed decisions about which loan may best suit their financial situation and goals. This transparency is crucial in the lending process, as it helps to ensure that borrowers fully understand and feel comfortable with the commitments they are making. In contrast, the settlement booklet provides information about the closing process rather than specific loan options, while the loan closing statement details the actual costs and transactions that occur at the time of closing. The servicing disclosure informs borrowers how their loan will be serviced and who will handle it after closing, rather than helping them compare options prior to committing. Thus, the Good Faith Estimate is the key document that supports borrowers in making side-by-side comparisons of loan offerings.

The Good Faith Estimate is designed to assist borrowers in comparing different loan options by providing them with details about the costs associated with a mortgage. This document outlines the estimated closing costs, loan terms, and any other fees associated with the mortgage process, allowing borrowers to see and evaluate the financial aspects of various loans side by side.

By having a clear view of these costs and terms, borrowers can make more informed decisions about which loan may best suit their financial situation and goals. This transparency is crucial in the lending process, as it helps to ensure that borrowers fully understand and feel comfortable with the commitments they are making.

In contrast, the settlement booklet provides information about the closing process rather than specific loan options, while the loan closing statement details the actual costs and transactions that occur at the time of closing. The servicing disclosure informs borrowers how their loan will be serviced and who will handle it after closing, rather than helping them compare options prior to committing. Thus, the Good Faith Estimate is the key document that supports borrowers in making side-by-side comparisons of loan offerings.