![]() Next, any necessary fees for services that you cannot shop around for are outlined. First, the loan estimate shows what portion of the closing costs are for loan origination, any points paid, the application fee and the underwriting fee. The closing costs are then itemized in the next section. Keep in mind that you’ll need to provide your lender a paper trail for these funds. You will be able to see how much cash you need on hand at closing. The next section gives you a snapshot of the loan closing costs. You’ll also see the estimated monthly cost of any additional taxes, insurance and assessments. The loan estimate will show how much you can expect to pay in principal and interest, mortgage insurance and escrow, as well as how those costs will change over time. Next, the projected monthly payment is broken out in detail. You’ll see the loan amount you requested, interest rate, projected monthly principal and interest due, whether there is a prepayment penalty and whether the loan has a balloon payment. Next, the terms of the loan are spelled out. Here you’ll find information such as the name of the applicants, the address of the property, loan term and type and whether the interest rate is locked (and if so, for what period of time). The top of your loan estimate will display some basic details about the loan. Here’s a breakdown of what you’ll find in an LE so you can better comprehend it. 9 Things You’ll Find in Your Loan EstimateĮven though a loan estimate is supposed to be easier to navigate and understand than previous versions, there is still a lot of information to absorb. 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. Once issued, the terms of the loan estimate are good for 10 days. You’ll still need to accept the offer and then provide additional documentation that you can repay the loan in order to lock it in. ![]() Keep in mind that simply receiving a loan estimate does not mean you are approved for the loan it’s an estimate of what the lender plans to offer you based on the information you provided. Once you provide this information, the lender is required to send you an LE within three days. In order to receive a loan estimate, you need to provide the lender with six pieces of personal information: your name, income, Social Security number (SSN), the address of the property you want to finance, the property’s value and the total amount you want to borrow. All loan estimates are formatted the same way, making it easy to compare multiple loan options. Now known as a loan estimate, this document tells you everything you need to know about your potential mortgage, including the interest rate, term length, monthly payment amount, escrow details and closing costs. Here’s a closer look at what it is and how to read it.įormerly known as a “Good Faith Estimate,” this form was updated in 2015 to be more useful and easy to read. Reviewing your loan estimate is an important part of the mortgage application process. Fortunately, a very important document known as a loan estimate (LE) can help. And if you are shopping a few lenders in search of the best deal, that is an incredible amount of info to keep track of and compare. When applying for a mortgage, there are a ton of details to iron out.
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