Review loan estimates | Consumer Financial Protection Bureau (2024)

What to do now

Watch for your Loan Estimates

Once you’ve submitted yoursix key pieces of information, each lender is required to send you a Loan Estimate within three business days. Allow a few extra days for mail delivery if the lender is using postal mail. If you haven’t received a Loan Estimate within that timeframe, call the lender and ask why.

Read your Loan Estimates carefully

  • Make sure they reflect the loan option that you discussed with the loan officer. If anything seems different, call the loan officer right away to ask why.
  • Double-check the important details and get help with unfamiliar terms with ourinteractive guide to the Loan Estimate form.

Check to see if your interest rate is locked

Some lenders may lock your rate as part of issuing the Loan Estimate, but some may not. If your rate is not locked, it can change at any time. If your interest rate is locked, your rate won’t change between now and closing, as long as you close within the specified timeframe and there are no changes to your application.

  • Check at the top of page 1 of your Loan Estimate to see whether your rate is locked, and until when.
  • Learn more about what a rate lock is and how it works.

If you haven’t already, find out more about the lender’s rate-lock policies

If your rate is not yet locked, ask:

  • When in the process do you typically lock interest rates? Could I lock earlier or later, if I wanted to?
  • What do I need to do to lock my rate? Are there any additional fees to lock my rate?
  • How many days would I have to close before my rate lock expires?
  • Are there other rate-lock periods available? How would the pricing on my Loan Estimate change if I wanted a different length of rate lock?

Regardless of whether your rate is already locked, ask:

  • What happens if I am unable to close in the specified amount of time?
  • For example, would there be a fee to extend the rate-lock?
  • How much would that fee be? Is there a chance that the lender would refuse to extend the rate-lock?

What to know

Your loan hasn’t been approved or denied yet

When you receive a Loan Estimate, the lender has not yet approved or denied your loan. This is true evenif 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. In fact, you are not committed to any lender before you have signed final closing documents.

Certain risky features must be highlighted on the Loan Estimate

Certain risky features are listed under Loan Terms on page 1 of the Loan Estimate. If any of these features are included in the loan, ask the loan officer why this feature is included. Ask the lender to give you another Loan Estimate for a loan without the feature, so you can see the difference in costs for a loan with less risk to you.

Can the loan amount increase after closing?

This is known asnegative amortization. It’s a risky feature that can increase the amount of debt you have and the cost of the loan.

Can the interest rate increase after closing?

Adjustable-rate mortgages are riskier than fixed-rate mortgages, but they can be a good choice in some situations.Learn more.

Can the monthly principal and interest payment increase after closing?

If you’re considering a loan with this feature, make sure your monthly budget can handle the increased payment.

Does the loan have aprepayment penalty?

This means that if you want to sell your home or refinance, you could owe the lender additional money because you paid off the loan early.

Does the loan have aballoon payment?

This means you need to make a big, lump-sum payment at the end of your loan term. If you are unable to make the balloon payment, unable to refinance your loan, or unable to reset the terms of your loan, you could lose your home.

If you need help reviewing your Loan Estimates, consider contacting a housing counselor

You can find a HUD-certified housing counseloronlineor by calling 1-800-569-4287.

How to avoid pitfalls

If there are errors on your Loan Estimate, get them fixed

If your name is misspelled, or other key details are wrong, don’t assume they will get fixed at some point along the way. Get them fixed now. Some errors, such as a typo in the address of the property you plan to purchase, may seem minor but are actually major errors that could affect your rate and costs.

If your Loan Estimate does not reflect what you discussed, ask the loan officer why

If the explanation you receive doesn’t make sense, be wary. Consider working with one of your other lenders instead. You can alsosubmit a complaintto the CFPB.

Don’t let anyone rush you

Take the time to review and compare your Loan Estimates before agreeing to proceed with a particular lender. The time you spend now can save you money and help prevent unpleasant surprises later.

Review loan estimates | Consumer Financial Protection Bureau (2024)


How accurate are loan estimates? ›

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.

Does a loan estimate mean you are approved? ›

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.

How to review a loan estimate? ›

When comparing Loan Estimates, make sure to compare the origination charges. Depending on the lender, origination charges may be more or less itemized. Common origination charges include application fees, origination fees, underwriting fees, processing fees, verification fees, and rate-lock fees.

What is the 3 day rule for loan estimates? ›

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.”

Can a loan estimate be revised? ›

Interest rate locks: If the interest rate is not locked when the loan estimate is provided, the lender may issue a revised loan estimate once that rate is locked.

Can you negotiate a loan estimate? ›

Negotiate to get the best deal for you

Negotiating can save you money. Your best bargaining chip is usually having Loan Estimates from other lenders in hand. Often, lenders are willing to match or beat their competitors' offers. They can also explain why their estimates differ from other lenders.

What is the 7 day rule for loan estimates? ›

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.

Can closing costs change after loan estimate? ›

The mortgage closing costs may be different if something important changed or wasn't included in your Loan Estimate. It's also possible that your income or assets turned out to be different from what you estimated when you first applied.

Does a lender have to honor a loan estimate? ›

Once issued, the terms of the loan estimate are good for 10 days. As long as there aren't any major changes to your application or financial situation, your lender has to honor the estimate if you begin the process of securing the loan within that time frame.

Why should a borrower review a loan estimate? ›

The loan estimate can help you understand any mortgage you apply for, whether you're buying a home or refinancing one. For the amount, type, and term of the loan you've applied for, the loan estimate will show your projected closing costs, monthly payment, interest rate, and annual percentage rate, among other details.

When must a loan estimate be revised? ›

A revised Loan Estimate must be provided within 3 business days of receiving information sufficient to establish a changed circ*mstance. When the rate is locked a creditor must provide a revised version of the Loan Estimate within 3 business days after the locking of the interest rate.

Who writes the loan estimate? ›

The lender must provide you a Loan Estimate within three business days of receiving your application.

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.

What is the waiting period for a loan estimate? ›

Loan Estimate -Initial disclosure (Delivery): The lender must provide the initial Loan Estimate no later than 3 business days (using the general definition of business day) after application is received.

Is a loan estimate good for 10 days? ›

Loan estimates will include their expiration date at the top of the first page and are good for 10 business days from the original issue date. Given the brief window, we recommend that you request multiple loan estimates from different lenders and shop around to narrow down your lending options.

Why is loan estimate so high? ›

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.

Are Zillow monthly estimates accurate? ›

If you ask Zillow, the Zestimate you see on your house or any house you are looking at is very accurate. They have a self-published nationwide median error rate of 2.4% for on-market properties and a 7.49% median error rate for off-market properties.

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