Guide
How to read your Loan Estimate
The Loan Estimate is the three-page form that tells you what your mortgage will cost. Here is how to read the parts that matter.
What the Loan Estimate is
By law, a lender must send you a Loan Estimate within three business days of your application. It is standardized, so you can lay two lenders' estimates side by side and compare them directly. Treat it as the real terms, not the verbal quote you were given.
Page 1: rate, payment, and cash to close
The first page shows your loan amount, interest rate, monthly principal and interest, and whether any of those can change. It also shows your estimated total monthly payment and the estimated cash you need at closing. Check whether the rate is locked and for how long.
Page 2: the fees
Page two breaks down closing costs: lender fees (origination, points), services you can and cannot shop for (appraisal, title), and prepaid items like taxes and insurance. If a fee looks large or unfamiliar, ask the loan officer to explain it in writing.
Page 3: comparisons and the people involved
The last page includes comparison figures and lists the lender and the loan officer, each with an NMLS ID. Use that number to confirm the loan officer is licensed and that the company matches the one on the rest of your paperwork.
Frequently asked questions
Is a Loan Estimate a commitment?
No. It is an estimate of terms, not loan approval, and it does not obligate you to that lender. It does let you compare offers on equal footing.
How many should I get?
Get a Loan Estimate from at least two or three lenders. Because the form is standardized, comparing rate and total costs is straightforward.
Where is the loan officer's NMLS number?
On page three, next to the lender and loan officer names. Verify it before you proceed.
Homebuyer due diligence
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