Question 1

Which document is designed to give a borrower an early standardized snapshot of estimated loan terms and closing costs?

Accepted Answer

The Loan Estimate is the early standardized disclosure that summarizes estimated loan terms and settlement charges. It is meant to help borrowers shop and compare options.

Question 2

Which document provides final loan terms and closing costs shortly before consummation?

Accepted Answer

The Closing Disclosure provides final loan terms, projected payments, and closing costs before consummation. It is the borrower's final standardized disclosure under TRID.

Question 3

A borrower wants to compare what changed between application and closing. Which two documents should be compared first?

Accepted Answer

The Loan Estimate and Closing Disclosure are designed to be compared so the borrower can see how estimated terms and costs evolved by closing. This comparison is a core TRID concept.

Question 4

Which fee increase from LE to CD is most likely to require a lender cure if no valid changed circumstance exists?

Accepted Answer

Origination charges are generally in the zero-tolerance category, so an increase without a valid changed circumstance usually requires a cure. Prepaids and certain borrower-selected items may fall outside that category.

Question 5

Why is it important for an MLO to review the LE carefully before it is sent?

Accepted Answer

The Loan Estimate often serves as the baseline against which later fee changes are measured under TRID tolerance rules. Errors at the LE stage can create cure exposure and borrower confusion later.

Question 6

A borrower says the CD shows higher cash to close than expected. What is the best first step?

Accepted Answer

When the CD looks different than expected, the best first step is to compare it to the most recent Loan Estimate and identify what changed. This helps determine whether the change is legitimate, tolerated, or curable.

Question 7

Which statement about the LE is most accurate?

Accepted Answer

The Loan Estimate is an estimate, not a final settlement statement. TRID controls when it must be issued, how it may be revised, and how certain fees may change by closing.

Question 8

What is the main reason a lender may need to issue a revised LE after a valid changed circumstance?

Accepted Answer

A timely revised Loan Estimate after a valid changed circumstance can reset the estimate baseline for affected charges. Without a proper revision, the lender may remain tied to the original tolerance baseline.

Question 9

Why should MLOs avoid minimizing differences between the LE and CD as 'normal' without review?

Accepted Answer

Some differences are expected, but others may raise tolerance, changed-circumstance, or accuracy issues. MLOs should review and explain differences carefully rather than dismissing them casually.

Question 10

Why does the timing of a revised LE matter?

Accepted Answer

A revised LE must be timely to reset the estimate baseline for affected charges. If the lender misses the timing rule, the original disclosure may remain the benchmark for tolerance purposes.

Loan Estimates and Closing Disclosures Practice Questions

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