The lender discloses the pre-payment penalty on which of the following documents?

The correct answer is the loan estimate, as this document is specifically designed to provide borrowers with key information about the costs associated with their mortgage, including any pre-payment penalties. The loan estimate outlines the terms of the loan, including interest rates, monthly payments, and potential fees that borrowers might encounter throughout the life of the loan.

The inclusion of the pre-payment penalty on the loan estimate is crucial because it gives borrowers transparency and understanding of their financial obligations. They need to be aware of any potential penalties for paying off the loan early, which could influence their decision-making regarding the mortgage.

Other documents mentioned serve different purposes or do not focus on disclosing financial terms in the same comprehensive manner. For instance, the 1003 form is primarily an application for a mortgage where borrowers provide their personal and financial information but does not specifically detail loan terms or penalties. The ECOA disclosure pertains to the Equal Credit Opportunity Act and is focused on preventing discrimination in lending rather than detailing loan terms. Lastly, the trust deed and the trust deed note contain information about the legal aspects of securing the loan and the borrower's obligations but do not serve the primary function of outlining costs like the loan estimate does.