According to CFPB guidelines, what happens if a borrower does not agree with the Loan Estimate terms?

The correct answer is significant because it highlights a key consumer protection aspect under CFPB guidelines. When a borrower receives a Loan Estimate, they are not obligated to accept the loan terms presented. This empowers borrowers to shop around and consider their options carefully, ensuring they can seek loan terms that better meet their financial needs and circumstances.

The Loan Estimate is designed to provide transparency and clarity regarding the terms of the loan, including interest rates, payment amounts, and fees. If the borrower finds the terms unacceptable, they retain the right to decline the loan without penalty or obligation. This principle underscores the importance of informed decision-making in the borrowing process, promoting fair treatment of consumers in the mortgage lending landscape.