Everyone
Got a Loan Estimate? The 5 lines to check first
Short answer
Every lender has to give you the same three-page Loan Estimate within three business days of your application. Start with five spots: the loan terms, the rate lock, Section A, lender credits and cash to close, and the comparisons on page 3.
1. Loan terms (page 1)
Check the loan amount, interest rate and monthly principal and interest. Then look at the yes/no column: can any of these go up after closing, and is there a prepayment penalty or balloon payment?
2. Rate lock (page 1, top)
Is the rate locked, and until when? An unlocked quote can change. Compare quotes issued close together, for the same loan amount and lock period.
3. Section A: origination charges (page 2)
This is what the lender charges, including any points. It's the cleanest apples-to-apples comparison between lenders. A lower rate with points here isn't automatically the better deal.
4. Lender credits and cash to close (page 2)
Lender credits reduce your closing costs, sometimes in exchange for a higher rate. Estimated cash to close is what you'll need to bring.
5. Comparisons (page 3)
"In 5 years" shows what you'll have paid in total and how much principal you'll have paid off. It's useful if you might sell or refinance. You'll also see the APR and Total Interest Percentage.
Line up two quotes with my free Loan Estimate comparison sheet.
Quick answers
When do I get a Loan Estimate?
Within three business days after you apply with a lender.
Does a Loan Estimate mean I'm approved?
No. It's an estimate of terms and costs, not an approval or a commitment to lend.
Can I compare Loan Estimates from different lenders?
Yes. The form is standardized, so you can compare line by line.
Sources
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About Jayson Cain
I'm a mortgage loan originator in Los Angeles and a real estate investor who finances my own rental. I help investors and self-employed borrowers understand which programs may fit.