On the loan estimate, which data tells applicants how much they will pay in interest over the life of the loan as a percentage of the loan amount?

The correct choice is TIP, which stands for Total Interest Percentage. This value informs applicants about the total interest they will pay over the life of the loan expressed as a percentage of the loan amount. The TIP provides a clearer understanding of the long-term cost associated with borrowing, allowing borrowers to compare the overall costs of different loans more effectively.

This information is crucial because it helps applicants grasp the financial implications of their mortgage beyond just the interest rate or monthly payments. It encapsulates the total interest as a portion of the loan, emphasizing the impact of the loan over its entire term.

While the other options like APR (Annual Percentage Rate) and the finance charge are also important, they serve different purposes. APR reflects the total cost of borrowing on an annual basis, including interest, certain fees, and points, while the finance charge represents the total fees and interest charged over the life of the loan in dollar terms. TIP specifically focuses on the interest component as a percentage of the loan amount, making it the most relevant choice for understanding how much interest will be paid over the life of the loan.