What is a Loan Estimate?
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Short answer
A is a standard three-page form you receive after applying for a mortgage. It shows the estimated interest rate, monthly payment, and total closing costs. Receiving the form is not an approval.
Full explanation
A Loan Estimate is a three-page form you receive after applying for a mortgage. It describes the loan you requested, including the estimated interest rate, monthly payment, and total closing costs. It also estimates taxes and insurance and shows how the rate and payments may change. Special features such as a prepayment penalty or negative amortization appear on the form. All lenders must use the same standard form, which makes side-by-side comparison easier.
Receiving the form does not mean the lender has approved or denied the application. It is a preview of terms, not a credit decision. Moving forward usually means the lender will ask for more financial documentation.
The standard Loan Estimate is not used for every product. Reverse mortgages, HELOCs, manufactured-home loans without a real-estate security interest, and certain assistance-program subordinate loans receive other disclosures.
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What is a Loan Estimate?
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