Loan Officer Practice Exam 2025 – Comprehensive All-in-One Guide for Exam Success!

The Loan Estimate disclosure requirement was established under the TILA-RESPA Integrated Disclosure (TRID) rule, which aims to provide consumers with transparency regarding loan terms and costs. Conventional loans, being a primary type of mortgage, are subject to these disclosure requirements. These loans typically involve fixed or adjustable interest rates and are not backed by the government, which means they fall under the general rules of consumer protection and disclosure.

In contrast, home equity loans and home equity lines of credit (HELOCs) are primarily secured by the borrower’s equity in their home and are specifically categorized under different disclosure requirements. Similarly, VA loans, which are backed by the Department of Veterans Affairs, also have their own set of disclosures but are not excluded from the Loan Estimate requirement.

Thus, the correct answer reflects that conventional loans are indeed required to provide a Loan Estimate, making them subject to the same disclosures aimed at protecting consumers in the mortgage process.