About Loan Estimate - $0

United States


What is a Loan Estimate?

A Loan Estimate is a three-page form that you receive after applying for a mortgage. The Loan Estimate tells you important details about the loan you have requested. The lender must provide you a Loan Estimate within three business days of receiving your application. The Loan Estimate is a form that took effect on Oct.

What Items Appear On A Loan Estimate?

The Loan Estimate is broken up into several sections that show how much the loan will cost you. The Loan Estimate is designed to be an easy read, with the most important information listed at the top. Let’s look at what the Loan Estimate covers.

*The Basics
There will be a section with some basic contact information as well as information about the property you’re buying in the top left-hand corner. It’s important to make sure this matches up with the details of your transaction

*Loan Overview
At the very top right-hand corner of the Loan Estimate, you’ll see a brief overview of your loan. This information should match what you’ve discussed with your lender.

*Projected Payments
Principal And Interest This shows your base monthly payment. Principal refers to the amount you’re planning to borrow. It’s divided into equal monthly amounts based on your loan term. As you pay down your principal balance, you’ll pay less in interest, so more of your mortgage payment will go toward the loan principal. That’s why your principal and interest payment is shown as one number – the payment amount stays consistent, but the balance between principal and interest changes over time.

*Costs At Closing
This section shows the closing costs of your loan, including what you’ll need to pay at closing. Closing costs account for a large portion of the cash you need for a mortgage and typically run about 2 – 6% of the purchase price or loan amount, depending on the purpose of the loan and the type of loan you’re getting.

*Loan Costs
The Loan Costs section goes over the costs of getting the loan – including your lender’s fees and fees for any third-party services.