When is the prepayment penalty disclosure required under Minnesota law due?

The requirement for the prepayment penalty disclosure to be provided within three business days of closing is in line with Minnesota law, which mandates that borrowers must receive this disclosure in a timely manner to ensure they are fully informed about the terms of their loan. The purpose of the disclosure is to inform borrowers of any penalties they may incur if they pay off their loan early. By providing this information before closing, borrowers have the opportunity to understand the potential financial implications of their actions and can make well-informed decisions regarding their loan options.

Providing the disclosure at loan origination or before accepting any loan application would not comply with the timeline required by the law, as it could potentially leave borrowers unaware of prepayment penalties until it's too late. Requiring disclosure within six months of loan approval also falls outside the legal requirement, as it would not allow adequate time for borrowers to act on this vital information before the closing of the loan. Thus, the requirement for disclosure within three business days of closing is essential for ensuring transparency and protecting borrowers' rights in Minnesota.