Skip to content

Prequalification Estimate & APR

Answered by: 

Question: 
What if a consumer is prequalifying for a loan and wants a cost estimate. Since the estimate also contains the loan amount, rate, payment, as well as the fees, (trigger terms) shouldn't it also contain the APR, or is it ok to allow this requirement to slide on the basis that it is similar to giving a real estate office or newspaper your rates?
Answer: 

The Commentary to 1026.2(a)(2) #1 indicates direct personal contacts "...such as follow-up letters, cost estimates for individual consumers or oral or written communications relating to the negotiation of a specific transaction." is not an advertisement. Therefore, this information does not trigger further advertising disclosures.

Additional Comment: If no house has been identified, this loan is not subject to RESPA. Therefore, you should be careful not to issue a GFE. If you do give a GFE, it is not a changed circumstance once a house has been identified.

First published on 08/16/2015

Filed under: 
Filed under lending as: 

Banker Store View All

From training, policies, forms, and publications, to office products and occasional gifts, it’s available here:

Banker Store

hot right now

image description

Looking for effective, convenient training on a particular subject?

BOL Learning Connect offers more than 200 courses ON-DEMAND or on CD ROM from AML to Reg Z and every topic in between.

Search Topics