The correct answer is the combination of the Loan Toolkit for all purchases and the CHARM booklet for all Adjustable Rate Mortgage (ARM) products. The Loan Toolkit is a required disclosure that helps borrowers understand the mortgage process and the various steps involved in obtaining a loan, including information about closing costs, interest rates, and terms. It aims to provide consumers with essential information to make informed decisions about their home purchase and mortgage options.
The CHARM (Consumer Handbook on Adjustable Rate Mortgages) booklet is specifically required for all ARM loans. It offers important insights into how adjustable-rate mortgages operate, including details about payment adjustments, potential risks, and the implications of interest rate fluctuations. By providing this information, the CHARM booklet helps borrowers grasp the complexities associated with ARMs, enabling them to compare these products with fixed-rate options more effectively.
Delivering both of these booklets within three business days of the signed application ensures that borrowers are well-informed and can engage with the mortgage process from an educated standpoint, thereby promoting transparency and understanding in mortgage lending. This is crucial in protecting consumers and helps ensure that they are fully aware of their options and obligations.