The 3-7-3 Rule in Mortgage Lending

If you’re shopping for a mortgage, you may hear about the “3-7-3 Rule.” It’s not a loan program or a type of mortgage. Instead, it’s a federal disclosure timeline designed to protect you as a borrower and make sure you have enough time to review important information before you commit.

What is the 3-7-3 Rule?

The 3-7-3 Rule comes from the Truth in Lending Act (TILA) and lays out three important timing requirements during the mortgage process:

1. 3 Days – Initial Disclosures

   • Within 3 business days of your completed loan application, your lender must provide initial disclosures.

   • This includes the Loan Estimate (LE), which outlines your estimated loan terms, interest rate, closing costs, and monthly payment breakdown.

2. 7 Days – Review Period

   • You must receive the Loan Estimate at least 7 business days before closing.

   • This gives you a full week to review the numbers, ask questions, and compare offers.

3. 3 Days – Waiting Period After APR Changes

   • If the Annual Percentage Rate (APR) changes by more than 1/8% (0.125%) on a fixed-rate loan or 1/4% (0.25%) on an adjustable-rate loan, your lender must issue a new disclosure.

   • You then get another 3 business days to review the updated terms before closing.

Why Does the 3-7-3 Rule Matter?

The rule was created to protect consumers from last-minute surprises at the closing table. Before these requirements, it wasn’t uncommon for buyers to see new fees or loan terms just hours before signing papers.

With the 3-7-3 Rule in place, you get:

• Time to review loan terms without pressure

• Protection from bait-and-switch tactics

• Clarity about closing costs before committing

Example: How It Plays Out

Let’s say you apply for a mortgage on Monday:

• By Thursday (3 business days later), you must receive your Loan Estimate.

• Your closing can’t happen until at least the following Tuesday (7 business days after the disclosure).

• If your APR changes significantly, closing would be delayed another 3 business days to give you time to review.

Key Takeaways for Homebuyers

• The 3-7-3 Rule isn’t red tape—it’s protection for you.

• It ensures your lender is transparent and gives you time to make informed decisions.

• If you ever feel rushed, remember: the law guarantees you this review period.

Final Thoughts

Buying a home is one of the biggest financial decisions you’ll ever make. The 3-7-3 Rule is there to keep the process fair, transparent, and consumer-friendly.

At Parish Lending, I walk my clients through each step of this timeline so you never feel in the dark. If you’re starting the homebuying journey and want a clear guide—not just paperwork—reach out today and let’s talk about your options.