Loan Estimate Page 1 Explained | Morty Home School (2024)

FAQs

What must be included on page 1 of the loan estimate? ›

Reading Page 1 of a Loan Estimate

Loan Terms: A summary of the loan term, amount, and initial payment. Projected Payments: Information on the initial escrow payments, property tax rate, and homeowners insurance. Costs at Closing: Estimated closing costs and fees.

The form provides you with important information, including the estimated interest rate, monthly payment, and total closing costs for the loan. The Loan Estimate also gives you information about the estimated costs of taxes and insurance, and how the interest rate and payments may change in the future.

“D+I” is the sum of all closing costs combined from all previous sections. Lender Credits: Lenders offer credits for interest rates that are “above market” in the sense that the base rate the consumer is receiving is above the Par Rate. Lender credits would also be listed on page 1 of the Loan Estimate.

Under the TRID rule, credit unions generally must provide the Loan Estimate to consumers no later than seven business days before consummation. Members must receive the Closing Disclosure no later than three business days before consummation.

The first page of the Closing Disclosure is almost identical to Page 1 of the Loan Estimate. It describes the: • Loan terms • Loan amount • Interest rate • Monthly P&I, and • Any prepayment penalty or balloon payment. This page also provides the projected payments over the life of the loan.

What is the TRID rule? The TRID rule requires lenders to provide two disclosure documents to lenders: a loan estimate and a closing disclosure. Because each document must be timed to give the borrower three days to look it over, it's sometimes referred to as the “three-day rule.”

When you receive a Loan Estimate, the lender has not yet approved or denied your loan. This is true even if your rate is already locked. The Loan Estimate shows you the terms the lender expects to offer you if you decide to move forward with your loan application. You have not committed to this lender.

You want accurate figures. At Homebuyer and plenty of other lenders, these costs get estimated as close to 100 percent accurate as possible. Remember that numbers are never exact upfront. Don't worry about any estimated fees that your lender doesn't dictate.

Here are some common reasons why the estimated charges in your Loan Estimate might increase: You decide to change the kind of loan, for example moving from an adjustable-rate to a fixed-rate loan. You decide to reduce the amount of your down payment. The appraisal on the home you want to buy came in lower than expected.

The Principal and Interest (P&I) is combined which represents the total scheduled loan payment amount. Principal (P) is the amount of the original loan still owed to the financial institution along with the interest (I) that is being applied to that loan on a monthly basis.

What triggers a revised loan estimate? ›

Common reasons you may receive a revised Loan Estimate include: The home was appraised at less than the sales price. Your lender could not document your overtime, bonus, or other irregular income. You decided to get a different kind of loan or change your down payment amount.

While the loan estimate is not a binding agreement, it should provide an accurate picture of the loan terms your lender intends to offer if you decide to move forward with them.

If the Loan Estimate is not timely when sent/provided, the lender is in violation of the law. Technically without a timely Loan Estimate the lender may not charge the consumer any fees. Not a good way to start.

The consumer must receive the corrected Loan Estimate no later than 4 (four) business days before consummation. Note: There must be at least 1 (one) business day between the disclosure of the most recent Loan Estimate and the issuance of the Closing Disclosure (§1026.19 (e)(4)(ii)-1).

Generally, the Loan Estimate requires the disclosure of categories of information that will vary due to the type of loan, the payment schedule of the loan, the fees charged, the terms of the transaction, and state law provisions.

Loan agreements typically include covenants, value of collateral involved, guarantees, interest rate terms and the duration over which it must be repaid.

What is it? A Loan Estimate is a three-page form providing important information about the mortgage loan you're considering.

When you apply for a mortgage loan, the lender is required to provide you with initial disclosures within three business days of application. Initial disclosures let you know what you can expect in terms of cost, monthly payments, and loan structure.