The Loan Estimate form addresses one of the big questions for closing: approximately how much cash will be required? It’s an estimate, not a final total; here’s a short list of the costs that might change, and by how much.
- Section A – Origination Charges should be the same amount at closing.
- Section B – Services that you can’t shop. Closing amounts should be within 10% of the estimate.
- Section C – Services you CAN shop. For service providers on the list provided by the lender, the 10% tolerance limit applies. Other service providers aren’t bound by the estimate, but it does provide some guidance and point of negotiation for these decisions.
- Section E – The Recording Fees should be within 10% of the estimate.
- Section F, G, and H: Prepaids, Initial Escrow, and ‘Other’ may vary from the estimate. Tolerance limits do not apply.
These Loan Estimate figures and tolerances, plus basic loan details, Deposit Credits, Adjustments and Down Payment should serve to compute your money-on-hand requirements at closing.
When assessing or comparing loans, keep these figures, ranges and tolerance limits in mind.