What does a borrower receive on the third business day prior to closing?

The correct answer is that a borrower receives the initial closing disclosure on the third business day prior to closing. The initial closing disclosure is a critical document as it outlines the terms of the mortgage, including the estimated closing costs and details of the loan itself. This disclosure must be provided to the borrower at least three business days before consummation of the loan, giving them time to review and ask questions about the terms and costs associated with their mortgage.

Understanding the timeline of these disclosures is essential for borrowers, as it ensures they have adequate information to make informed decisions. This three-day window allows the borrower to compare the final terms with previous estimates and to ensure complete understanding before proceeding to closing.

In contrast, the final closing disclosure is provided closer to the closing date and must be received by the borrower no later than three business days before closing but is not typically provided three days prior. The intent to proceed form is generally part of the loan application process, and the loan approval letter is typically issued after underwriting and does not correspond to the timing of disclosures related to closing.