How soon after required disclosures are provided may a loan close?

The correct answer is that a loan may close on the 3rd business day after disclosures are provided. This timing is a key component of the federal regulations under the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA) which are designed to ensure that consumers have adequate information to make informed decisions regarding their mortgage loans.

According to these regulations, after the borrower receives the required disclosures, they are afforded a three-business-day waiting period which is meant to give them time to review the loan terms, consider their options, and understand their rights. The disclosures include the Loan Estimate and any other documents that detail the terms and costs of the loan, which is crucial for transparency in the lending process.

This three-day period is essential to protect consumers from rushing into decisions that may not be in their best interest. Therefore, the loan can be scheduled to close on the third business day following the receipt of the required disclosures, ensuring compliance with federal laws aimed at promoting informed borrowing. If the loan was scheduled to close any sooner than that, it would not adhere to the mandated waiting period, potentially leading to compliance issues for the lender.