What must lenders provide according to the Mortgage Act of 1974 before closing?

The correct answer pertains to the requirement that lenders must provide a good faith estimate of closing costs before closing on a mortgage. This obligation arises from the Real Estate Settlement Procedures Act (RESPA), part of the broader legal framework established by the Mortgage Act of 1974. The good faith estimate serves to inform borrowers about the anticipated costs associated with closing the loan, allowing them to understand their financial obligations better.

This estimate helps promote transparency and trust in the lending process, ensuring borrowers are aware of the costs they will incur beyond just the loan principal and interest. By providing this information upfront, lenders contribute to a more informed decision-making process for borrowers.

Other options do reference important aspects of the lending process; however, they are not specifically mandated to be provided before closing under the Mortgage Act of 1974. For instance, while a detailed description of loan terms is beneficial and a practice lenders should adhere to, it is not explicitly required in this context like the good faith estimate is.