Understanding Your
Initial Loan Disclosures
Your lender is required by law to send you an initial disclosure package within three business days of your application. Here's exactly what to expect — and what to do with each document.
What Is an Initial Disclosure Package?
When you apply for a mortgage, federal law (RESPA and TRID) requires your lender to deliver a set of standardized documents within 3 business days of receiving your application. These disclosures are designed to give you a clear picture of your loan terms, estimated costs, and important consumer rights — before you're locked into anything. Reviewing them carefully is one of the most important steps in the homebuying process.
What's in the Package
Click any document below to learn what it is, what to look for, and what action (if any) is required from you.
The Loan Estimate is the most critical document in your package. It's a standardized 3-page form that gives you a clear summary of the key terms and estimated costs of the mortgage you've applied for. Every lender uses the exact same format, which makes it easy to compare offers side by side.
What It Shows
- Loan amount, interest rate & loan term
- Monthly payment breakdown (P&I, taxes, insurance)
- Estimated closing costs (itemized)
- Estimated cash needed to close
- Whether your rate can increase (ARM)
- Prepayment penalty information
- 5-year cost comparison
Key Things to Review
- Is the loan amount correct?
- Is the interest rate what you were quoted?
- Does the loan type match what you discussed?
- Review Section A (Origination Charges) carefully
- Note which costs are "shoppable" (Section C)
- Compare APR to interest rate
Your Action: Review carefully and contact your loan officer with any questions. To move forward, you must sign and return your Intent to Proceed within 10 business days. Costs on your final Closing Disclosure will be compared back to this document.
This document gives your lender authorization to verify the information you provided on your application. It confirms that the details on your application are accurate and that you consent to the lender pulling your credit, verifying employment, and reviewing financial records.
What You're Authorizing
- Credit report inquiry
- Verification of employment and income
- Verification of bank and asset accounts
- Review of tax returns and financial statements
- Sharing of application information with investors/agencies
What You're Certifying
- Application information is accurate and complete
- You will occupy the property as stated
- You have not omitted any relevant financial information
- You understand misrepresentation is a federal offense
Your Action: Sign and return. This is required for your loan to be processed. If anything looks inaccurate on your application, notify your loan officer before signing.
If your loan includes an escrow account (which holds funds for property taxes and homeowner's insurance), this form shows how your escrow account will be set up and managed. It details the projected deposits and disbursements for the first year of your loan.
What It Covers
- Estimated monthly escrow payment amount
- Projected property tax amounts
- Projected homeowner's insurance premium
- Estimated escrow cushion (reserve)
- Month-by-month escrow balance projections
Good to Know
- These are estimates — actual tax bills may differ
- Escrow accounts are analyzed annually
- Surpluses are refunded; shortages require adjustment
- Not all loans require escrow (varies by loan type)
Your Action: Review and retain for your records. Notify your loan officer if the property tax or insurance figures appear significantly off from what you're expecting.
Required by the Gramm-Leach-Bliley Act (GLBA), this notice explains how your personal and financial information is collected, used, and shared by the lender. It outlines your rights regarding your private data and the categories of third parties with whom information may be shared.
What It Explains
- Types of personal information collected
- How information is used internally
- Which third parties may receive your info
- Your opt-out rights (where applicable)
- How information is protected
Common Third-Party Sharing
- Credit bureaus and reporting agencies
- Appraisers and title companies
- Mortgage investors (Fannie Mae, Freddie Mac, etc.)
- Servicers (who may handle your loan after closing)
Your Action: No signature required. Read and retain. If you have concerns about data sharing, review the opt-out provisions in the notice or contact your loan officer.
Published by the Consumer Financial Protection Bureau (CFPB), this booklet is required for most purchase mortgage applications. It's designed to help first-time and experienced homebuyers understand the mortgage process, compare loan options, and make informed decisions throughout the transaction.
Topics Covered
- How to define what you can afford
- Understanding loan types and terms
- How to shop and compare lenders
- Navigating the Loan Estimate
- Understanding the closing process
- Glossary of mortgage terms
Who It's For
- First-time homebuyers learning the process
- Repeat buyers who want a refresher
- Anyone comparing multiple loan offers
- Anyone unsure about closing costs
Your Action: No action required — this is a consumer education resource. We encourage you to read it, especially sections on comparing Loan Estimates and understanding your Closing Disclosure.
Federal law (ECOA) requires lenders to notify you of your right to receive a free copy of any appraisal, valuation, or report ordered in connection with your mortgage application. This notice explains when and how you'll receive that copy.
What It Covers
- Your legal right to receive appraisal copies
- Timeframe for delivery (generally 3 business days before closing)
- How to request a copy earlier if desired
- Types of valuations this applies to (appraisals, BPOs, AVMs)
Why It Matters
- You have the right to review the appraised value
- Low appraisals can affect your loan amount
- You may request a reconsideration of value (ROV)
- Appraisal is paid by you (typically) — you own the report
Your Action: No immediate action needed. When your appraisal is completed, you'll automatically receive a copy. Contact your loan officer if you haven't received it at least 3 business days before closing.
Required under the Dodd-Frank Act and Reg Z, this disclosure confirms that your loan officer presented you with loan options across different loan products and that you were not "steered" toward a higher-cost or less favorable option for the purpose of increasing the loan officer's compensation.
What It Shows
- Loan options reviewed (typically 3 scenarios)
- Rate comparison across loan products
- APR comparison for each option
- Monthly payment for each option
- Your selected loan option
Why It Exists
- Protects you from being put in a costlier loan
- Ensures you reviewed alternatives
- Confirms your choice was informed
- Required by federal mortgage regulations
Your Action: Review the options listed and sign. If you don't recognize the loan options presented, or if something looks different from what you discussed, contact your loan officer before signing.
This notice informs you of your rights under the Equal Credit Opportunity Act (ECOA) and the Fair Housing Act. It confirms that lending decisions cannot be made based on race, color, religion, national origin, sex, marital status, age, or the fact that you receive public assistance.
Your Rights Under ECOA
- Right to be considered on creditworthiness alone
- Right to know why credit was denied (if applicable)
- Right to know which credit bureau was used
- Right to dispute inaccurate credit information
Protected Classes
- Race, color, national origin
- Religion, sex, familial status
- Age (provided you are of legal age)
- Disability, receipt of public assistance
Your Action: No action required. Retain for your records. If you feel you've been discriminated against at any point in the lending process, you have the right to file a complaint with the CFPB or HUD.
The Most Important Next Step: Intent to Proceed
After reviewing your disclosure package, the most time-sensitive action is indicating your Intent to Proceed (ITP). This is your formal signal to the lender that you want to move forward with the loan as disclosed.
You have 10 business days from the date your Loan Estimate was delivered to provide your Intent to Proceed. Until you do, the lender cannot move forward — they cannot order your appraisal, collect application fees (beyond the credit report), or begin full processing of your file.
Your loan team will send you instructions for how to provide your Intent to Proceed electronically. It only takes a moment, and it keeps your transaction on schedule.
Tips for You
How to Review Your Disclosures Like a Pro
A little preparation goes a long way. Here are the most important things to keep in mind as you review your package.
Check Your Loan Terms First
Start with Page 1 of the Loan Estimate. Confirm the loan amount, interest rate, and loan term match exactly what you discussed with your loan officer.
Understand the APR vs. Rate
Your interest rate is the cost of borrowing. The APR includes fees and gives a fuller picture of total loan cost. A higher APR vs. rate means more upfront fees rolled in.
Don't Ignore the Timelines
The 10-day window to respond with your Intent to Proceed is a hard deadline. Missing it doesn't kill the deal, but it can cause costly delays — especially in a competitive market.
Ask Questions — It's What We're Here For
No question is too small. If a number doesn't look right or a term is confusing, reach out to your loan officer immediately. That's what we're here for.
Save Everything
Keep a copy of every disclosure document. You'll want to compare your initial Loan Estimate to the final Closing Disclosure you receive three days before closing.
Expect Revised Disclosures
If your loan terms change (rate lock, property change, program change), you may receive a revised Loan Estimate. Review each revision the same way you reviewed the original.
Questions About Your Disclosures?
Your loan team is here to walk you through every document. Don't hesitate to reach out — understanding your loan is part of our job.
