# Loan Estimate

> A Loan Estimate is the standard three-page form a lender must give you within three business days of a mortgage application, showing the estimated rate, monthly payment, closing costs and cash to close so you can compare offers.

Also called: LE. Topic: Mortgages and loans.

Every lender uses the same form, so you can line offers up side by side. It isn’t an approval: when you get one, the CFPB notes, the lender hasn’t yet approved or denied your loan.

## When do you get a Loan Estimate?

Within three business days after the lender receives your application. Under federal rules, an application is six pieces of information: your name, income and Social Security number, the property address, an estimate of its value and the loan amount you want.

Until you have it, the only fee a lender can charge you is for pulling your credit report. Other fees, such as an application or appraisal fee, can come only after you receive the estimate and tell the lender you intend to proceed.

## What’s on each page?

Page 1 shows the loan amount, [interest rate](https://brokerandagent.com/glossary#interest-rate) and monthly payment and whether they can change, any [prepayment penalty](https://brokerandagent.com/glossary#prepayment-penalty) or balloon payment, estimated closing costs and cash to close. It also says whether your rate is locked, and until when.

Page 2 itemizes the [closing costs](https://brokerandagent.com/glossary/closing-costs): what the lender charges, services you can and can’t shop for, taxes and government fees, prepaid items and the first deposit into your [escrow account](https://brokerandagent.com/glossary#escrow-account). Page 3 has comparisons, including the [annual percentage rate](https://brokerandagent.com/glossary#annual-percentage-rate) and what you’ll have paid in the first five years.

## How do you compare Loan Estimates?

Ask for them on the same day if you can, for the same loan amount, loan type and down payment, since rates move daily. Then compare the origination charges, the rate and the [discount points](https://brokerandagent.com/glossary#discount-points) you’d pay for it, the APR, and the five-year total on page 3.

Shopping doesn’t cost your credit much: the CFPB says multiple mortgage credit checks within 45 days are recorded as a single inquiry.

## Can the costs change before closing?

Some can. Fees paid to the lender or its affiliates and transfer taxes generally can’t go up unless your circumstances change. Recording fees and some third-party services chosen from the lender’s list can rise up to 10% in total. Prepaid interest, insurance and escrow deposits can change by any amount.

When something real changes, such as the loan amount, the appraisal or your income documentation, you’ll get a revised Loan Estimate. Locking your rate also triggers one within three business days. Your [Closing Disclosure](https://brokerandagent.com/glossary#closing-disclosure) arrives at least three business days before closing so you can check it against the last estimate.

## Comparing two offers on a $350,000, 30-year loan

| | |
| --- | --- |
| Lender A rate, no points | 6.50% |
| Lender A principal and interest | $2,212/month |
| Lender B rate, with 1 point | 6.25% |
| Cost of 1 point (1% of the loan) | $3,500 |
| Lender B principal and interest | $2,155/month |
| Monthly savings with Lender B | $57 |
| Months to earn back the point | About 61 |

Paying the point only pays off if you keep the loan for more than about five years, which is why the five-year comparison on page 3 is worth reading. Rates here are illustrations, not quotes.

## Common mistakes

- Comparing a locked estimate from one lender with a floating one from another.
- Looking only at the rate and ignoring points and origination charges.
- Paying an application fee before you’ve received the Loan Estimate.
- Treating the Loan Estimate as a loan approval.

## Questions

### Is a Loan Estimate a commitment to lend?

No. It shows the terms a lender expects to offer if you go ahead. Approval comes later, after [underwriting](https://brokerandagent.com/glossary#underwriting).

### Do you have to accept a Loan Estimate?

No. You aren’t committed to a lender until you tell it you intend to proceed, so you can collect several estimates and choose.

### How is a Loan Estimate different from a Closing Disclosure?

The Loan Estimate comes at the start, within three business days of applying. The Closing Disclosure shows the final terms and arrives at least three business days before closing.

Calculator: [Closing cost calculator](https://brokerandagent.com/tools/closing-cost-calculator)

Data: [Closing costs by state](https://brokerandagent.com/research/closing-costs-by-state)

## Related terms

- [Closing Disclosure](https://brokerandagent.com/glossary#closing-disclosure): A Closing Disclosure is the five-page form showing your mortgage’s final terms, monthly payment and closing costs. Your lender must get it to you at least three business days before closing so you can compare it with your Loan Estimate.
- [Annual percentage rate](https://brokerandagent.com/glossary#annual-percentage-rate): Annual percentage rate is the yearly cost of a loan, combining the interest rate with certain fees such as points and origination charges. Because it includes fees, it’s usually higher than the interest rate and useful for comparing offers.
- [Rate lock](https://brokerandagent.com/glossary/rate-lock): A rate lock is a lender’s promise to hold your mortgage interest rate for a set period, typically 30 to 60 days, as long as you close in time and nothing in your application changes.
- [Discount points](https://brokerandagent.com/glossary#discount-points): Discount points are an upfront fee paid at closing to lower a mortgage’s interest rate. One point costs 1% of the loan amount, and how much each point lowers the rate varies by lender and by day.
- [Closing costs](https://brokerandagent.com/glossary/closing-costs): Closing costs are the fees and taxes buyers and sellers pay to complete a home sale beyond the price itself, such as lender charges, title insurance, settlement and recording fees and transfer taxes. Who pays which depends on the contract and local custom.

## Sources

- [CFPB: What is a Loan Estimate?](https://www.consumerfinance.gov/ask-cfpb/what-is-a-loan-estimate-en-1995/)
- [CFPB: Loan Estimate explainer](https://www.consumerfinance.gov/owning-a-home/loan-estimate/)
- [CFPB: How much does it cost to receive a Loan Estimate?](https://www.consumerfinance.gov/ask-cfpb/how-much-does-it-cost-to-receive-a-loan-estimate-en-2003/)
- [CFPB: Can my final mortgage costs increase from my Loan Estimate?](https://www.consumerfinance.gov/ask-cfpb/can-my-final-mortgage-costs-increase-from-what-was-on-my-loan-estimate-en-172/)
- [12 CFR 1026.19: Loan Estimate and Closing Disclosure timing](https://www.law.cornell.edu/cfr/text/12/1026.19)

Checked 2026-10-02 by the Broker & Agent team. General information, not legal, tax or lending advice.

Source: https://brokerandagent.com/glossary/loan-estimate