Loans that do not require a Loan Estimate use which document instead?

Loans that do not require a Loan Estimate use which document instead?

• A. Good Faith Estimate
• B. Closing Disclosure
• C. Truth in Lending Statement
• D. Appraisal report

Answer: (A)

The main idea here is understanding which disclosure form is used when a loan isn’t covered by the TRID requirement for a Loan Estimate. For loans that don’t require a Loan Estimate, the Good Faith Estimate is used to outline and estimate settlement costs. Although TRID introduced the Loan Estimate for most closed-end mortgages and the Closing Disclosure for final costs, some loans remain exempt from those TRID disclosures, so the older form that can be used to estimate costs is the Good Faith Estimate. The other options serve different purposes: the Closing Disclosure shows final costs after the loan is set, the Truth in Lending Statement relates to disclosed finance charges but isn’t the cost-estimate form, and an appraisal report is an appraisal document, not a cost estimate.

The main idea here is understanding which disclosure form is used when a loan isn’t covered by the TRID requirement for a Loan Estimate. For loans that don’t require a Loan Estimate, the Good Faith Estimate is used to outline and estimate settlement costs. Although TRID introduced the Loan Estimate for most closed-end mortgages and the Closing Disclosure for final costs, some loans remain exempt from those TRID disclosures, so the older form that can be used to estimate costs is the Good Faith Estimate. The other options serve different purposes: the Closing Disclosure shows final costs after the loan is set, the Truth in Lending Statement relates to disclosed finance charges but isn’t the cost-estimate form, and an appraisal report is an appraisal document, not a cost estimate.