By Larry Higgins, MS, CFM · Mortgage Loan Originator · NMLS #2530499
The three-page form every lender must give you after you apply. What each page tells you, which costs can change before closing, and what to check line by line.
A Loan Estimate is a standard three-page form that a lender must deliver or mail within three business days after receiving your mortgage application. Page 1 shows the loan terms, projected monthly payments and the cash needed to close; page 2 itemizes the closing costs; page 3 shows comparison figures such as the APR and the Total Interest Percentage. Because every lender uses the same form, you can compare offers line by line. Fees paid to the lender or broker and transfer taxes generally cannot increase at closing; some third-party fees can rise by up to 10 percent in total; prepaid interest, insurance and escrow deposits can change.
Federal rules (Regulation Z, 12 CFR 1026.19(e)) require the lender to deliver or place in the mail your Loan Estimate no later than three business days after it receives your application, and at least seven business days before you close. Your application is complete for this purpose once you have given six pieces of information: your name, income, Social Security number so credit can be pulled, the property address, an estimate of the property's value and the loan amount you want.
Until you tell the lender you intend to go ahead, it may not charge you any fee except a reasonable fee for pulling your credit report. The Loan Estimate is not a loan approval and does not lock your rate; page 1 says whether and until when the rate is locked.
The top of page 1 shows the loan term, purpose (purchase or refinance), product (for example a 30-year fixed or an adjustable rate) and loan type (conventional, FHA or VA). The Loan Terms table lists the loan amount, interest rate and monthly principal and interest, and answers yes or no to whether each can increase after closing, and whether the loan has a prepayment penalty or a balloon payment.
Projected Payments shows the monthly payment in each period of the loan, including mortgage insurance and an estimate of property taxes and homeowners insurance held in escrow, and says which of those items you will pay on your own. Costs at Closing gives the total estimated closing costs and the estimated cash to close.
Loan Costs are the costs of getting the loan. Section A lists origination charges paid to the lender and broker, including any points. Section B lists services the lender requires and chooses, such as the appraisal and credit report. Section C lists services the lender requires but lets you shop for, such as title services; the lender must give you a written list of providers, and you may choose another provider.
Other Costs are costs of buying or owning the home: Section E for taxes and government fees such as recording fees and transfer taxes, Section F for prepaids such as homeowners insurance and prepaid interest, Section G for the initial deposit into your escrow account, and Section H for other items such as a home inspection. The Calculating Cash to Close table then subtracts your deposit, seller credits and any lender credits.
The same rule (12 CFR 1026.19(e)(3)) sets how far each estimate may change on the Closing Disclosure, which you must receive at least three business days before closing. A lender can issue a revised Loan Estimate only for specific reasons, such as a change you request or new information about your credit or the property.
Comparisons shows the total you will have paid in principal, interest, mortgage insurance and loan costs after five years, and how much of that is principal. The Annual Percentage Rate (APR) expresses the cost of the loan, including certain fees, as a yearly rate, and the Total Interest Percentage (TIP) shows the total interest over the life of the loan as a percentage of the loan amount. Other Considerations covers the appraisal, whether the loan can be assumed, whether the lender intends to service the loan, and the late-payment charge.
To compare lenders, ask for Loan Estimates for the same loan type, amount, term and lock period on the same day, then compare Section A, the rate and the APR, not only the monthly payment. Page 3 also lists the lender and the mortgage broker with their NMLS numbers, which you can verify at nmlsconsumeraccess.org.
The lender must deliver or mail it no later than three business days after it receives your application, which is complete once you have provided your name, income, Social Security number, the property address, an estimated property value and the loan amount you want.
No. It discloses the estimated terms and costs. Approval comes from the lender's underwriting, and the rate is locked only when the lender confirms a lock; page 1 shows whether and until when the rate is locked.
Some can and some cannot. Fees paid to the lender or broker and transfer taxes generally cannot increase; recording fees and shoppable third-party services chosen from the lender's list can increase by up to 10 percent in total; prepaid interest, insurance and escrow deposits can change if they were estimated in good faith.
The interest rate sets your principal and interest payment. The APR includes the interest rate plus certain loan costs expressed as a yearly rate, which makes it useful for comparing offers; it does not include every closing cost.
A lender must issue a Loan Estimate only once it has all six items of an application, including a property address. Before that you can ask for a written estimate, which must state that your actual rate, payment and costs could be higher and that you should get an official Loan Estimate before choosing a loan.
Have a specific scenario? Talk it through with a licensed loan officer.
(732) 561-4292Send a messageBased on the Consumer Financial Protection Bureau's Loan Estimate explainer and Regulation Z, 12 CFR 1026.19(e) and 1026.37. Reviewed September 2026. This guide is general educational information, not personalized financial, legal or tax advice, and is not a commitment to lend or a guarantee of approval, rate, cost or savings. Ai Remco LLC is a licensed mortgage broker, NMLS #2560393. All loans subject to credit approval, underwriting and property appraisal. Equal Housing Opportunity.
