When must a lender provide a Closing Disclosure to the borrower?

A lender is required to provide a Closing Disclosure to the borrower at least three business days before the closing of the loan. This regulation is rooted in the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA) reforms aimed at ensuring transparency in the loan process. The Closing Disclosure contains important financial details about the mortgage loan, such as loan terms, projected monthly payments, and closing costs. This three-day window allows borrowers adequate time to review the information, ask questions, and identify any discrepancies before finalizing the transaction.

The other options do not align with the regulatory requirements. For instance, providing the disclosure at the time of the loan application or immediately after loan approval does not give the borrower sufficient time to understand the financial commitments they are entering into. Similarly, presenting it during the first meeting is premature, as there could be changes made to the loan terms after initial discussions. The three business days prior to closing stand as the mandated period for delivering the Closing Disclosure to enhance borrower awareness and promote informed decision-making.