A Loan Estimate is a standard three-page form every lender must send within three business days of your application. Page 1 shows the loan terms, payment and cash to close; page 2 itemizes closing costs; page 3 shows comparison figures like the APR and the total cost over five years. Because every lender uses the same form, it’s the best way to compare offers.
What counts as an application
Once you give a lender six pieces of information (your name, income, Social Security number, the property address, an estimated value and the loan amount), it must send a Loan Estimate within three business days. You don’t have to commit to the lender to get one.
Page 1: the basics
- Loan terms: amount, rate, monthly principal and interest, and whether any can increase.
- Prepayment penalty and balloon payment: look for “NO” on both.
- Projected payments: including mortgage insurance and estimated escrow.
- Rate lock: whether the rate is locked and until when.
- Estimated cash to close.
Page 2: closing costs
- Section A, origination charges: the lender’s own fees and points. The key number for comparing lenders.
- Section B, services you can’t shop for: appraisal, credit report.
- Section C, services you can shop for: often title and settlement.
- Sections E to H: taxes and government fees, prepaids and escrow deposits.
- Section J: total closing costs, after any lender credits.
Page 3: comparisons
- In 5 years: total paid and principal paid off, useful if you’ll sell or refinance.
- APR: the rate including certain costs; see APR vs. interest rate.
- Total interest percentage over the loan’s life.
Next steps
To proceed, tell the lender you intend to proceed; costs can then change only within set limits. Compare your final Closing Disclosure with it; see the Closing Disclosure, explained. Estimate costs before you apply with the closing cost estimator.
Common questions
When will I get a Loan Estimate?
Within three business days of giving a lender your name, income, Social Security number, property address, estimated value and loan amount.
Which part of the Loan Estimate should I compare?
Section A (origination charges and points), the rate, lender credits and the five-year total on page 3.
Does a Loan Estimate commit me to the lender?
No. You only commit once you tell the lender you intend to proceed.
Updated October 2026. Educational content. OfferBacked is not currently a lender and doesn’t issue pre-approvals or loans.