How to read a Loan Estimate, page by page
By Francisco Williams, CCIM · CCIM · Mortgage Loan Originator NMLS #1858674 · CA DRE #01979442 · Updated
Short answer
A Loan Estimate is the standard three-page form a lender must provide within three business days of your application. To compare offers, check page 1 (loan terms, and whether the rate or payment can rise), page 2 (Section A origination charges, and B and C services), and page 3 (the five-year totals and APR). Compare like for like.
Page 1: the loan itself
Loan amount, rate, monthly principal and interest, and three yes/no questions: can the amount increase, can the rate increase, is there a prepayment penalty or balloon? Also check the rate-lock status and its expiration.
Page 2: closing costs
Section A is what the lender itself charges, including points. Section B covers services you can't shop for, and Section C services you can. Sections E–H are taxes, prepaids and escrow, which depend more on the property than on the lender. When comparing two lenders, focus on A, B and C.
- Same loan amount, term and product type on both?
- Rate locked? Lock expiration date?
- Page 1: can the amount, rate or payment increase? Prepayment penalty? Balloon?
- Section A (origination charges, including points): total for each
- Sections B + C (services): total for each
- Lender credits (Section J): amount
- Page 3: "In 5 Years" total paid and principal paid off
- APR and Total Interest Percentage (TIP)
- Which estimate costs less over the time you expect to keep the loan?
Use the worksheet with the actual Loan Estimates; we don't publish rates.
Page 3: comparisons
The "In 5 Years" figure and the APR help compare offers with different point structures. Total Interest Percentage shows interest over the full term.
Compare two Loan Estimates side by side
Put both estimates on the table at the same page. The worksheet below is the order to check them in. Different lenders format the same costs differently, so compare totals within each section rather than line names.
Bring it to the conversation
Francisco's residential lending page explains how files are reviewed, and the requested documents list shows what to gather before applying.
Frequently asked questions
When do I get a Loan Estimate?
Within three business days after a lender receives your application information.
Is a Loan Estimate a loan approval?
No. It's an estimate of terms and costs, not a commitment to lend.
What section shows lender fees?
Section A, Origination Charges, on page 2.
Sources
Buyer readiness checklist: the 90 days before you apply
A three-month checklist for Southern California buyers: credit, savings, documents and the decisions to make before talking to a lender.
Closing Disclosure vs. Loan Estimate: what's allowed to change
The three tolerance buckets under federal rules, the three-day waiting periods, and how to compare your Closing Disclosure line by line.