Your lender is required to send you a Loan Estimate within three business days of receiving your application. It's a standardized three-page document. Most buyers look at the interest rate and monthly payment on page one, then set it aside. That's the part of the form that matters least.
Page 1: The Numbers Most Buyers Focus On
Page one shows the loan amount, interest rate, estimated monthly payment, and estimated closing costs. These are important, but they're also the numbers that can be massaged most easily in a first draft. Look at the loan type, fixed or adjustable, and the rate, but understand that closing costs on page one are estimated totals. The breakdown matters more.
Check whether your rate is locked or floating. If it's not locked, the rate on this document could change before closing. The lock box in the top right corner of page one tells you the status.
Page 2: This Is Where the Real Review Happens
Page two breaks closing costs into two sections: Section A lists origination charges (what the lender makes on the loan, fees, points, origination percentage), and Sections B through H cover third-party services like title insurance, appraisal, and prepaid items.
Origination charges in Section A are negotiable. If you see a line that says "origination fee" of one to two percent of the loan amount, that's lender profit. Some lenders charge it; others don't. You can ask for it to be reduced or eliminated in exchange for a slightly higher rate, or ask the lender to explain exactly what that fee covers.
Third-party services in sections B and H are largely fixed, appraisal, title, and recording fees don't vary much by lender. But you can shop title and settlement services in Section C. The Loan Estimate must tell you which services you can shop, and shopping title insurance in Florida can save $500 to $1,500. Understanding the difference between pre-approval types also helps you know which lenders are serious before you even reach this stage.
Comparing Loan Estimates from multiple lenders?
We'll walk you through every line so you know exactly what you're agreeing to, and where you can push back before closing.
Get My Loan EstimateComparing Loan Estimates From Multiple Lenders
The standardized format exists specifically so you can compare side by side. If you have estimates from two lenders, line up the interest rate, APR, total origination charges in Section A, and the estimated cash to close. A lower rate with higher origination fees may or may not be the better deal depending on how long you plan to hold the loan.
APR, the Annual Percentage Rate, is the rate that factors in origination fees spread over the loan term. It's a blunt instrument, but a useful one. If lender A has a rate of 6.75% and APR of 7.2%, and lender B has a rate of 6.875% and APR of 6.95%, lender B likely has lower fees.
Page 3: The Numbers You Almost Certainly Skip
Page three shows comparisons at five years and over the loan's life, how much you'll have paid in principal and interest, what your remaining balance will be, and the total interest paid. These numbers are sobering, and they're useful context for comparing fixed vs. adjustable rate options or deciding whether to buy points.
Page three also lists your lender's contact information and contains a confirmation that the lender has received your application. It's worth reading the comparisons section at least once, even if you don't act on it.
What Can Change Between the Estimate and Closing
The Loan Estimate is an estimate. Some numbers are legally fixed, origination charges can't increase. But other costs can shift. If you use a third-party title company, property taxes change, or the appraisal comes in unexpectedly, your final Closing Disclosure may differ from the initial estimate.
You'll receive a Closing Disclosure at least three business days before closing. That's your final document. Compare it to the Loan Estimate line by line. Any significant differences in Section A warrant a question to your lender before you sign. See our post on avoiding last-minute mortgage issues for what else can shift in those final days.
At 14 Days To Close, we explain every line before you sign. You shouldn't feel like you're closing blind.
