Yes, the LE is a disclosure based on the best information available at the time it's issued. If the applicant's income doesn't support the loan request at all, there won't be a closing -- you'll deny the loan request. If the documented income doesn't meet your criteria for the loan program requested but will support a loan from a different program, you can counteroffer and, when the applicant says, "Yes, let's do that," you'll have an intent to proceed and you will have a changed circumstance to justify issuing a revised Loan Estimate with adjustments to the costs related to the change in program.
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8