The 3/7/3 rule is an important timing requirement that governs the process of obtaining a mortgage loan. This rule is designed to ensure that borrowers receive key documents at crucial points in the loan process. Here’s what you need to know about the 3/7/3 rule:
Within three business days of receiving a loan application, the lender must provide the borrower with an initial Truth in Lending Statement. This document outlines the basic terms and costs of the loan, such as the loan amount, interest rate, and fees.
After the borrower receives the TILA statement, they have seven business days to review it and decide whether they want to move forward with the loan.
Once the borrower notifies the lender that they wish to proceed with the loan, the lender must provide the borrower with the final TILA disclosure at least three business days before closing. This document provides a final breakdown of the loan’s costs and terms.
The 3/7/3 rule is in place to provide borrowers with ample time to review loan documents so they can make informed decisions about their financial future. As a borrower, it’s important to pay close attention to the timing of these disclosures and ask your lender any questions you may have about the loan terms or costs. By doing so, you can feel confident that you’re taking on a mortgage that meets your needs and aligns with your financial goals.