Understanding your mortgage Loan Estimate
The Loan Estimate is a standard three-page form that lets you compare offers line by line. Here’s what to look at.
Sourced from official pages · Updated September 30, 2026💡 Key takeaways
- Lenders must give you a Loan Estimate within three business days of your application, on a standard form.
- Page 1 shows the rate and payment; page 2 the costs; page 3 comparisons such as APR.
- The Closing Disclosure should arrive at least three business days before closing.
- Get estimates from several lenders on the same day.
What it is
After you apply for a mortgage, the lender must give you a Loan Estimate within three business days. Every lender uses the same form, so you can compare offers side by side.
🔍 What to compare
- Interest rate and monthly payment on page 1, including whether the rate can change.
- Loan costs and other costs (page 2): origination charges, services you can shop for, taxes and government fees.
- APR and total interest percentage (page 3), which help compare the full cost of loans.
Before closing
You should receive the Closing Disclosure at least three business days before closing. Compare it with your Loan Estimate and ask about any differences.
Shop around
Get Loan Estimates from several lenders on the same day with the same loan type. Then use the compare tool to see total cost.
Page-by-page guide
| Section | What to look for |
|---|---|
| Page 1: loan terms | Loan amount, interest rate, whether the rate can change, monthly payment, prepayment penalty and balloon payment |
| Page 1: costs at closing | Estimated closing costs and cash to close |
| Page 2: loan costs | Origination charges, services you cannot shop for, services you can shop for |
| Page 2: other costs | Taxes, government fees, prepaids and initial escrow |
| Page 3: comparisons | Total you will pay in five years, APR and total interest percentage |
How to compare two offers
- Line up the same loan type, amount and term.
- Compare interest rate and APR.
- Compare “Origination charges” first, since they are what the lender controls.
- Check services you can shop for and estimate savings.
- Ask about any difference you do not understand.
🔤 Key terms
| Term | Meaning |
|---|---|
| Loan Estimate | Standard three-page form of loan terms and costs |
| Closing Disclosure | Final form of terms and costs, given before closing |
| APR | Yearly cost including certain fees |
| Total interest percentage (TIP) | Total interest over the loan’s life as a percentage of the loan amount |
Red flags to ask about
- A rate that can change or a prepayment penalty
- A balloon payment
- Negative amortization
- Large charges under “services you cannot shop for”
⚠️ Common mistakes to avoid
- Comparing estimates given on different days when rates moved.
- Ignoring page 3 comparisons.
- Not reading “services you can shop for”.
- Signing the Closing Disclosure without comparing it to the Loan Estimate.
🛠️ Try it yourself
❓ Frequently asked questions
Is a Loan Estimate a loan approval?
No. It is an estimate of terms and costs; the lender has not approved or denied your loan.
How many Loan Estimates should I get?
Several from different lenders; CFPB encourages comparing.
Does requesting a Loan Estimate hurt my credit?
It usually involves a hard credit inquiry; multiple mortgage inquiries in a short period are typically treated as one for scoring, but check with the credit-scoring model.
Can the Loan Estimate change?
Some costs can change; ask which charges are limited by rules and which are estimates.
📚 Sources
This guide is general information, not financial, tax or legal advice. Rules and limits change; confirm with the sources above or a licensed professional.