Tennessee Realtor State Practice Exam 2025 - Free Real Estate Practice Questions and Study Guide

The Loan Estimate is the document that provides a detailed breakdown of the estimated loan terms, including the interest rate, monthly payments, and closing costs associated with the mortgage. It is designed to help borrowers understand the costs of the loan and compare different loan offers from various lenders easily. By presenting a clear comparison of mortgage loan rates and estimated fees, the Loan Estimate enables buyers to make informed decisions regarding their financing options before committing to a loan.

The other documents mentioned serve different purposes. The Closing Disclosure, for example, is presented closer to the closing of the loan and provides final details about the mortgage, including the actual costs that will be charged at closing. The Truth in Lending Statement offers information about the cost of credit, but it is less focused on the comparison of loan rates and fees than the Loan Estimate. The Good Faith Estimate is similar to the Loan Estimate but has been largely replaced by it in most situations regarding new loans, making the Loan Estimate the more relevant and updated document for comparing mortgage options.