What is the maximum number of days allowed to resolve a loan application after the issuance of a Loan Estimate?

The maximum number of days allowed to resolve a loan application after the issuance of a Loan Estimate is 60 days. This timeframe is established under the rules set forth by the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA).

After a Loan Estimate is issued, applicants have a limited period in which to review their loan terms, shop around, and ensure that they fully understand the costs associated with their mortgage. In practice, lenders must make a decision regarding the loan within 60 days to ensure that the terms provided in the Loan Estimate remain valid, including the interest rate and certain fees. If the application is not resolved within this timeframe, a new Loan Estimate must be issued to the borrower, which may include updated terms and costs.

Understanding this 60-day requirement helps ensure compliance with federal regulations and protects consumers by providing them with a clear window for making informed decisions regarding their mortgage applications.