2025 Florida Realtor Sales Associate Practice Exam – Comprehensive Prep

The requirement for buyers to be informed about closing costs is established by the Real Estate Settlement Procedures Act (RESPA). This federal law mandates that lenders provide borrowers with detailed information regarding the costs associated with real estate transactions, particularly at the closing phase. One of the primary objectives of RESPA is to promote transparency in the settlement process and to help consumers understand the actual costs they will incur when finalizing a real estate deal.

Under RESPA, lenders must provide a Good Faith Estimate (GFE) or a Loan Estimate that outlines the estimated closing costs, including fees for services such as underwriting, title insurance, and appraisal. Additionally, RESPA requires the delivery of a Closing Disclosure form, which itemizes the actual closing costs, ensuring that buyers have access to crucial financial information before completing their purchase.

In contrast, the other options refer to different regulations. The Truth-in-Lending Act primarily deals with the disclosure of credit terms and interests to consumers. The Fair Housing Act focuses on prohibiting discrimination in housing-related transactions. Lastly, the Consumer Credit Protection Act encompasses various consumer protection laws but does not specifically address closing cost disclosures related to real estate transactions. Thus, RESPA is the specific act that ensures buyers are informed about their closing costs.