A section-by-section guide to loan terms, projected payments, closing costs, comparisons, and lender shopping.
Page 1: terms and payment
The Loan Estimate is designed to summarize important terms and estimated costs after a mortgage application reaches the required information stage.
Page 2: closing costs
Page one highlights loan amount, rate, payment features, projected principal and interest, mortgage insurance, estimated escrow, and cash to close.
Page 3: comparisons
Page two separates loan costs from other costs and identifies services the borrower may or may not be able to shop for.
Services you can shop for
Page three provides comparison tools, lender and loan-officer information, and other disclosures. The five-year cost and APR can be useful but should be interpreted in context.
Compare consistently
Compare estimates with the same loan amount, property assumptions, lock status, term, and timeframe. A low rate paired with high points is not directly comparable to a no-point rate.
Questions to ask before acting
- What assumptions could materially change the result?
- How much cash will remain after closing?
- What happens if taxes, insurance, repairs, or income change?
- Which terms should be confirmed in writing?
Bottom line
Use this guide as a framework for better questions and more complete comparisons. Actual eligibility, pricing, legal rights, and transaction requirements depend on the borrower, property, lender, program, contract, and location.