Which document outlines the estimated settlement costs for a particular transaction?

The document that outlines the estimated settlement costs for a particular transaction is the Loan Estimate. This form provides borrowers with a clear breakdown of expected costs associated with a mortgage loan, including loan terms, projected payments, and estimated closing costs. It is provided to the borrower within three business days after they apply for a mortgage, allowing them to compare different loan offers.

The HUD-1 Settlement Statement is a document that was used in real estate transactions to itemize all final closing costs. However, it is no longer used for most transactions involving federally related mortgages. Instead, the Closing Disclosure now serves to provide borrowers with a final accounting of all costs at closing, but it is not primarily an estimate.

The Affiliated Business Arrangement Disclosure does not detail settlement costs; rather, it is a disclosure providing information about relationships between parties in a transaction that may lead to referrals and potential fees.

Therefore, the correct document for estimating settlement costs is the Loan Estimate, as it is specifically designed to inform borrowers of expected charges before they finalize their loan.