What does the term "Initial Disclosures" refer to?

The term "Initial Disclosures" refers to the preliminary estimates and information provided to the borrower regarding the loan they are seeking. These documents are essential as they help ensure transparency and compliance with federal regulations, such as the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA).

Initial Disclosures typically include important details about the loan terms, estimated closing costs, and other critical information that allows the borrower to make informed decisions about their mortgage application. By providing this information upfront, lenders facilitate better communication and build trust with borrowers, ultimately leading to a smoother loan process.

In contrast, options that mention the final terms of the loan, recorded mortgage documents, or appraisal reports pertain to different phases of the loan process, where specific agreements and evaluations occur after the initial disclosures have been provided.