Loan Estimate. . .what is it?
Keith Collins, Keith Collins Team. Today I want to talk about the LE or Loan Estimate. This one’s going to be long but really important, especially if you’re buying a home or refinancing a property. LE: Loan Estimate. I’m going to give you a description and my explanation. Loan Estimate: A federal disclosure that must be provided to loan applicants no more than 3 business days after receiving a completed application. What is a completed application? We use the acronym: SPINAL, a social security number, a property address(that’s important), income, name of borrower, estimated value and a loan amount. Property address, that’s why it’s so important,. We have to give a loan estimate within 3 business days of an application. Well if you’re not in contract on a home, I don’t have a property address. So therefore we don’t do a loan estimate. We can, but we’re not federally required to. That provides some confusion at times. For us, we send out the loan estimate as soon as we receive a property address, meaning you’re in contract. But we provide written estimates prior to that, so you have full breakdowns. Ok, let’s go back to this. Ok, federal disclosure that must be provided to loan applicants no more than 3 business days after receiving a completed application. This disclosure provides an estimated cost of the loan for which the borrower has applied, effective October 3rd, 2015. So, pretty recent change. The loan estimate replaces the good faith estimate or GFE and the early til disclosure previously required by RESPA TILA. So basically the good faith estimate that a lot of people asked for in 2015 was replaced by the loan estimate, ok? So, sometimes customers are asking for a GFE or good faith estimate and we don’t have that anymore. We have the loan estimate and an estimated fees disclosure that we send out. If you have any questions, give us a phone call. Keith Collins, Finance of America.