Lenders supply a Loan Estimate form for valid mortgage applications. This form documents these essential elements of the approved loan:
- Services borrowers CAN shop in relation to the loan
- Services borrowers CANNOT shop
- Loan terms
- Loan costs
- Project payments
- Cash and costs required to close the loan
- A loan summary to aid comparing this estimate to other estimates.
Loan Estimate forms also provide details about loan assumption policies, appraisal, insurance, late-payment policies, and refinancing. The Estimate should also disclose whether the lender intends to service the loan directly.
All Loan Estimates are not identical. Information that is NOT related to a specific application may be excluded. Careful reading and comparison is always a good practice.