Loan Estimate
A Loan Estimate is a standardized three-page form a lender must give you within three business days of your mortgage application. It lists your estimated interest rate, monthly payment, closing costs, and total cash to close, so you can compare offers across lenders.
The Loan Estimate is the federal disclosure that turns a quote into something you can actually compare. Every lender uses the same three-page format, so the interest rate, projected monthly payment, lender fees, third-party costs, prepaids, and the bottom-line cash to close all appear in the same place on every offer. A lender must provide it within three business days of receiving your application.
Use it to shop. Request Loan Estimates from several lenders for the same loan amount and term, then compare the origination and lender fees, the rate, and the total cash to close side by side. Some figures, such as government recording charges, cannot change much, while lender fees and services you can shop for often can. A few days before closing you receive a Closing Disclosure, which shows the final numbers to check against your Loan Estimate.
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Related terms: Closing Costs , Cash to Close , Origination Fee
Source: Consumer Financial Protection Bureau, About the Loan Estimate
Last updated . Part of the FinExplained finance glossary .