Which statement is TRUE about TRID?

• A. It requires lenders to disclose closing costs at settlement only after the loan closes
• B. It is known as the "Know Before You Owe Rule."
• C. It applies only to refinance loans
• D. It eliminates the need for a loan estimate

Answer: (B)

TRID consolidates TILA and RESPA disclosures into a single, standardized set of documents to help borrowers understand loan costs and terms before committing. It's known as the Know Before You Owe Rule because its main aim is to give borrowers clear, accurate information early so they can compare offers and avoid surprises at closing. Under TRID, lenders must provide a Loan Estimate within three business days of receiving an application and a Closing Disclosure at least three business days before closing. It applies to most closed-end mortgage loans secured by real property, including purchases and refinances, though some loans (such as HELOCs and reverse mortgages) are excluded. It does not replace the Loan Estimate with something else; the Loan Estimate is a core part of TRID's disclosures.