What should I check first?
Confirm the loan amount, purpose, product, term, loan type, and rate-lock status match what you discussed.
Loan Estimate guide
How to read a Loan Estimate, line by line
Start with the loan you were promised. Then check the full payment, the price of getting the rate, the cash you need at closing, and the comparison figures on page 3.
The direct answer
A Loan Estimate is not just a rate quote.
It is a three-page map of the mortgage: what you are borrowing, what you may pay each month, what the lender and other providers charge, how much cash you may need at closing, and standardized figures for comparing similar loans. Read it in that order so a low rate does not hide expensive points or fees.
Page 1: confirm the loan before judging the price
- Loan terms. Confirm the loan amount, purpose, product, term, and loan type match what you requested. Also check for a prepayment penalty or balloon payment.
- Rate lock. Check whether the rate is locked. If it is not locked, the rate, points, and lender credits can change. If it is locked, note when the lock expires.
- Projected payments. Principal and interest is only part of the housing payment. Add mortgage insurance and estimated escrow, then note any taxes, insurance, or assessments the estimate says are not escrowed.
- Costs at closing. Page 1 summarizes estimated closing costs and estimated cash to close. Use the detailed calculations on page 2 to understand where those numbers came from.
Page 2: see what you are paying to get the loan
SectionWhat it containsWhat to ask
A · Origination chargesPoints and lender or broker charges connected to making the loan.What would the rate and payment be with zero points?
B and C · ServicesRequired services you cannot shop for and services you can shop for.Which charges are controlled by the lender, and which providers can I choose?
E through H · Other costsTaxes, prepaids, escrow deposits, and other transaction costs.Are both lenders estimating these outside costs on the same assumptions?
J · Lender creditsA negative amount that reduces closing costs.What rate and payment would I receive without the credit?
Cash to close is not the same as closing costs
Closing costs are the upfront loan and transaction costs. Estimated cash to close includes the down payment and closing costs, then accounts for deposits already paid, seller credits, lender credits, and other adjustments. It is the better starting point for planning how much money you may need to bring to closing.
Page 3: use the comparison figures carefully
APR combines the interest rate with certain finance charges and expresses them as an annual percentage. The five-year figures show total payments and principal paid over five years. These are useful comparison checks when the loan amount, term, product, and other assumptions align. They do not replace reviewing the actual dollar charges or your likely time in the mortgage.
A low rate can be expensive to buy. A low cash-to-close figure can rely on a higher rate or a larger credit. The answer is in the tradeoff between today, each month, and the time you expect to keep the mortgage.
What can change before closing?
Some costs generally cannot increase, some are limited by a 10 percent cumulative tolerance, and some can change. A valid changed circumstance can also permit a revised Loan Estimate. If the Closing Disclosure differs from the Loan Estimate, ask the lender to identify exactly what changed and why before you sign.
Common questions
Closing costs or cash to close?
Closing costs are one part of the transaction. Cash to close also reflects down payment, deposits, credits, and adjustments.
Can the figures change?
Yes, but the rules differ by cost category and changed circumstances. Ask for the reason behind every meaningful change.
Use your numbers
Let Lenny organize the offer around the decision.
Check one Loan Estimate or compare two using payment, APR, points, credits, lender-controlled costs, cash to close, and timeline.
Official sources
Educational guidance only. Document extraction and examples can be incomplete. Review the original disclosures and confirm final terms, pricing, eligibility, and costs with a licensed mortgage lender.