Introducing the New Loan Estimate
Glossary
Process as of August 1, 2015
The TILA-RESPA rule consolidates four existing disclosures required under TILA and RESPA for closed-end credit transactions
secured by real property into two forms: a Loan Estimate that must be delivered or placed in the mail no later than the third
business day after receiving the consumer’s application, and a Closing Disclosure that must be provided to the consumer at least
three business days prior to consummation.
Page 1
Page 1 provides a summary of the key loan terms and costs. The design separates figures that show the basic loan terms (e.g., the
principal and interest payment and loan costs) from figures that provide consumers with affordability information (e.g., the total
monthly payment and cash required to close).
1. Loan Details
Shows transaction information and includes a
reminder to save the Loan Estimate to compare with
the Closing Disclosure.
2. Date Issued
The date the Loan Estimate is mailed or delivered to
the consumer.
3. Loan Terms
2
1
3
Shows the basic terms of the loan and whether they
may increase or change.
4. Prepayment Penalty
Lenders will be required to show the maximum
prepayment penalty amount in the LE. Currently
the early TIL disclosure only requires the existence of
a prepayment penalty and prepayment penalty fees.
4
5
5. Projected Payments
Shows affordability information, including how and
when principal and interest payments can change
over time, the estimated taxes and insurance for the
property, and the total monthly payment, including
if taxes and insurance payments are escrowed or
excluded from the loan payment.
6. Costs at Closing
Shows additional affordability costs, including cash
to close and components of the closing costs.
6
This is a three page summary of some of the major changes coming with the implementation of the TILA/RESPA
Integration Disclosure. For full details, please refer to the reference material available on the CFPB website.
New Penn Financial NMLS# 3013. Equal Housing Lender. ©2015 New Penn Financial, LLC. All rights reserved.
Page 2
Page 2 itemizes the costs associated with the loan and with the real estate transaction. It also provides adjustable rate and
adjustable payment information when applicable. “A” through “J” look familiar, that’s because they correspond with page two of
the Closing Disclosure.
These sections are designed to give a breakdown of the cost of services provided to complete the loan.
7. Loan Costs
Lists the costs associated with the Loan, including
the lender’s charges and required services. These
costs are grouped by services for which the consumer
can or cannot shop for.
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8
8. Other Costs
Lists the costs that are not determined by the lender,
including taxes, insurance premiums, and optional
services.
9. Calculating Cash to Close
Lists the costs that make up the Cash to Close,
including deposit and credits.
10. Adjustable Payment (AP) Table
Lists payments that can adjust, such as Interest Only
Payments. (See below table)
9
11. Adjustable Interest Rate (AIR) Table
Lists the details for adjustable interest rates.
(See below table)
Note: Lender Paid Compensation
On the old GFE, it was added into Box 1 as an
origination charge to the borrower. Then, the amount
was entered in as a credit in Box 2 to offset the fee.
The change on the Loan Estimate is that Lender
Paid Compensation or offsetting credit will not be
disclosed at all. So for all LPC transactions, there will
be no charge showing up on the LE.
10
11
This is a three page summary of some of the major changes coming with the implementation of the TILA/RESPA
Integration Disclosure. For full details, please refer to the reference material available on the CFPB website.
New Penn Financial NMLS# 3013. Equal Housing Lender. ©2015 New Penn Financial, LLC. All rights reserved.
Page 3
Page 3 provides three figures that consumers can use to compare loan offers: In 5 Years, APR, and Total Interest Percentage.
It also lists disclosures mandated by statute, including disclosures for Appraisal, Assumption, Homeowner’s Insurance, Late
Payments, Loan Acceptance, Liability After Foreclosure, Refinancing, and Servicing. Page 3 has space for an optional consumer
signature line so the lender can document receipt of the disclosure.
12. Lender Details
Provides basic contact and identification information
for the lender and mortgage broker, if needed.
13. Comparisons
Provides three different ways a consumer can
compare one loan to another-the total paid and
principal paid in 5years (In 5 Years), the APR, and
the Total Interest Percentage.
14. APR
12
13
Provides costs over the life of the loan expressed as
a rate.
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15
15. TIP
16
Provides the total amount of Interest borrower
pays over the loan term as a percentage of the
loan amount.
16. Other Considerations
Includes several current and newly-required
disclosure statements.
17. Confirm Receipt
Allows for consumer signatures to document receipt
of the disclosure.
17
This is a three page summary of some of the major changes coming with the implementation of the TILA/RESPA
Integration Disclosure. For full details, please refer to the reference material available on the CFPB website.
New Penn Financial NMLS# 3013. Equal Housing Lender. ©2015 New Penn Financial, LLC. All rights reserved.