Loan Estimates: The Basics

When you apply for a mortgage and provide the 6 required pieces of information, a lender must provide a Loan Estimate within 3 business days if the loan is approved. This video explains the basics.

The Loan Estimate is a standard form, with required information. Yours will include:

  • Loan terms, including interest and loan schedule
  • Projected payments
  • Costs at closing, including:
    • Total Interest Percentage
    • APR (Annual Percentage Rate)
    • Estimates of costs from lender-recommended providers (“Can’t Shop”). Final costs must be in defined limits of these estimates.
    • Estimates of costs that you can shop; these will vary based on your decisions.

Be clear that the Loan Estimate is an estimate – not a final, binding contract for loan costs and terms.  It will give you a ballpark understanding about this loan, and some limits on the possible changes in final costs.

For more assistance (and additional videos) on the specific parts and pages of a Loan Estimate, search “Loan Estimate” on this site.

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