What a Loan Estimate shows

A Loan Estimate is a 3-page form a lender must give you within 3 business days of your application. It shows the rate, the monthly payment and the closing costs on the same form at every lender, so you can compare offers side by side. Rule¹

Give the six items that make an application: name, income, Social Security number, address, value estimate and loan amount. Rule²

The interest rate is the yearly cost of borrowing, without fees. The APR is broader: it adds points, broker fees and other charges, so it's usually higher. A Loan Estimate shows the rate on page 1 and the APR on page 3. Known³

Discount points lower your interest rate in exchange for paying more at closing; one point costs 1% of the loan amount. Lender credits work the other way: lower closing costs for a higher rate. Points pay off only if you keep the loan long enough. Known⁴

A lender only has to honor its Loan Estimate for 10 business days, and it can't treat silence as a yes.

• Compare Loan Estimates page by page.
• Tell the lender you choose that you intend to proceed.
• Expect to pay the appraisal fee and send full documents next. Rule⁵

No Loan Estimate after 3 business days? Call the lender and ask why. Rule¹