Mortgage Loan Originators (MLO) Federal Laws Practice Test

The primary purpose of a "good faith estimate" is to provide a borrower with an estimate of the costs associated with obtaining a mortgage. This document outlines the expected charges and fees that the borrower can anticipate during the mortgage process, making it a crucial tool for borrowers to understand their financial commitments before finalizing a mortgage agreement. By presenting these estimates, the good faith estimate helps borrowers compare different loan offers and assists them in making informed decisions about which mortgage best fits their needs and situations. It plays a significant role in promoting transparency in the mortgage industry and ensures that borrowers are better prepared for the financial implications of their loan.

While the other options pertain to aspects of the mortgage or lending process, none serve as the primary aim of a good faith estimate. The focus of the good faith estimate is mainly on cost estimation rather than finalizing loan approval, detailing the application process, or tracking payment history.