What is a Loan Estimate?
A Loan Estimate is a standardized three-page document a lender must provide within three business days of receiving your application. It spells out the interest rate, monthly payment, closing costs, and key terms of the loan being offered.
Because every lender is required to use the exact same form, the Loan Estimate is the only apples-to-apples way to compare offers. It replaced the old Good Faith Estimate on October 3, 2015.
Why it matters
Fee sheets, phone quotes, and rate tables in ads aren't binding and aren't standardized — they mean little next to a Loan Estimate. If you want to compare lenders honestly, this is the document that counts.
When do you receive one?
A lender owes you a Loan Estimate once you've given them these six pieces of information. Provide all six, and the three-business-day clock starts.
- 01Your full legal name
- 02Your current income
- 03Your Social Security number (for the credit pull)
- 04The property address
- 05The estimated value of the property
- 06The loan amount you want
What each page shows.
Three pages, three jobs: your terms, your costs, and a side-by-side of the loan over time.
Your headline terms
The top-line summary: loan amount, rate, monthly payment, and the all-important rate lock box (upper right). Locked, your rate can't move before closing; unlocked, it can change any hour. Verify every number here first — and ask your lender to lock before you shop, so competing offers are measured against a fixed target.
Where the money goes
The fee breakdown, split into Loan Costs (Origination A, Services you can't shop for B, Services you can shop for C) and Other Costs like taxes, insurance, and prepaid interest. Section A is where lenders differ most — and where shopping saves the most. The page ends with your Estimated Cash to Close: your true upfront number.
The long view
Costs over five years, the APR (which folds fees into the rate), and the Total Interest Percentage — plus who services the loan and the lender's NMLS ID. Confirm the lender and loan-officer details are accurate; you can look up any NMLS ID at nmlsconsumeraccess.org.
Which fees can change?
Not every number is final. Federal rules sort fees into tolerance categories that cap how much they can rise between the Loan Estimate and the final Closing Disclosure.
Cannot change
- Lender origination charges
- Discount points
- Transfer taxes
Up to 10% (in aggregate)
- Title services
- Recording fees
- Settlement / escrow
No set limit
- Prepaid interest
- Property taxes & insurance
- Escrow deposits
Change in circumstances
Those caps assume your loan stays the same. If something material shifts — you change the loan type or down payment, the appraisal comes in off, your credit changes, income can't be documented, or you request a rate lock later — the lender may legally reissue the Loan Estimate.
How to compare two offers
Lay two Loan Estimates side by side and look at five figures. APR matters most — it bundles lender fees into the rate, so it reflects the true cost of the offer.
Don't be fooled by a fee sheet
Some lenders hand you a fee sheet or loan summary instead. These aren't standardized and aren't legally binding — they're easy to make look better than the real offer. Only the Loan Estimate is the official, comparable disclosure.
And even on a real Loan Estimate, watch for red flags: unexpected discount points, unusually high origination charges, or a rate that's only competitive because fees are buried elsewhere. The whole point of the standard form is that you can catch this — if you know where to look.