Which of the following describes a "Loan Estimate"?

The correct choice accurately defines a "Loan Estimate" as a document that provides borrowers with a clear outline of the estimated loan terms and costs associated with a mortgage. This document is crucial because it helps potential borrowers understand key financial elements before they commit to a mortgage. It includes important details such as the interest rate, monthly payment, closing costs, and other fees related to the loan. This transparency is essential for informed decision-making, enabling borrowers to compare terms between different lenders effectively.

In contrast, the other options represent documents or summaries that do not align with what a Loan Estimate is intended to provide. A document outlining the final costs of a mortgage refers to the Closing Disclosure, which is provided later in the process, while a summary of the borrower's credit score pertains to credit reports and does not encompass loan terms and costs. A record of payments made on the loan refers to account statements or amortization schedules, which track the borrower’s payment history, rather than offering initial cost projections. Thus, the description of the Loan Estimate as an outline of estimated loan terms and costs is precisely what distinguishes it from other mortgage-related documents.