What period must a lender wait after the loan offer is made before closing?

What period must a lender wait after the loan offer is made before closing?

• A. A minimum of three business days
• B. One week
• C. Five business days
• D. Two business days

Answer: (A)

The correct answer is that a lender must wait a minimum of three business days after the loan offer is made before closing. This requirement is tied to the federal Truth in Lending Act (TILA), which mandates a waiting period to ensure that borrowers have sufficient time to review the terms and conditions of the loan. This three-day cooling-off period allows borrowers to understand their commitments, compare offers, and make informed decisions without feeling rushed. This waiting period is critical for consumer protection, as it enables borrowers to carefully assess the loan paperwork and seek advice if needed. It also helps prevent any rushed decisions that might not be in the best interest of the borrower. The three-business-day rule emphasizes transparency in the lending process and supports responsible lending practices.

The correct answer is that a lender must wait a minimum of three business days after the loan offer is made before closing. This requirement is tied to the federal Truth in Lending Act (TILA), which mandates a waiting period to ensure that borrowers have sufficient time to review the terms and conditions of the loan. This three-day cooling-off period allows borrowers to understand their commitments, compare offers, and make informed decisions without feeling rushed.

This waiting period is critical for consumer protection, as it enables borrowers to carefully assess the loan paperwork and seek advice if needed. It also helps prevent any rushed decisions that might not be in the best interest of the borrower. The three-business-day rule emphasizes transparency in the lending process and supports responsible lending practices.