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The Loan Estimate

QUICK SUMMARY

The Loan Estimate is the standardized federal disclosure of a mortgage's terms, projected payments, closing costs, and cash to close, and for most closed-end mortgages the lender must deliver or mail it no later than the third business day after receiving the six pieces of information that make up an application.

Every borrower who applies for most kinds of home loans receives a Loan Estimate. It is a three-page form designed by the Consumer Financial Protection Bureau so that every lender presents the same information in the same places. That design has a purpose. A borrower who receives two Loan Estimates from two lenders can lay them side by side and compare line by line.

The form replaced older disclosures under the TILA-RESPA Integrated Disclosure rule, usually called TRID. The CFPB's guide to the Loan Estimate and Closing Disclosure is the CFPB Guide to the Loan Estimate and Closing Disclosure Forms.

When the clock starts: the six items

The delivery deadline begins when the lender has an application. For this rule, an application exists once the lender has received six pieces of information:

  • The consumer's name.
  • The consumer's income.
  • The consumer's Social Security number, so credit can be pulled.
  • The property address.
  • An estimate of the property's value.
  • The mortgage loan amount sought.

Once all six are in hand, the lender is generally responsible for delivering the Loan Estimate or placing it in the mail no later than the third business day after receiving them. The CFPB's TRID FAQs address this.

A lender can ask for more information, such as pay stubs or bank statements, but it cannot hold back the Loan Estimate waiting for them once the six items exist.

How business days are counted for this deadline

For the three-business-day delivery rule, a business day is a day the lender's offices are open to the public for carrying on substantially all of its business functions. A lender closed on Saturdays does not count Saturdays.

That definition is different from the one used for the Closing Disclosure waiting period, which counts every calendar day except Sundays and federal legal holidays. Both rules say "three business days," and the two counts can land on different dates. Count each one by its own rule.

Fictional example: a buyer provides a name, income, Social Security number, a Fort Worth address, an estimated value, and a loan amount on Monday. The lender's offices are open Tuesday, Wednesday, and Thursday. The Loan Estimate has to go out by Thursday. A friendly email with rough numbers sent the night before the six facts existed was not the disclosure, and it did not start the clock.

What the lender can charge before the estimate

Until the borrower receives the Loan Estimate and indicates an intent to proceed, the lender generally cannot charge fees other than a bona fide and reasonable fee for obtaining the credit report. Appraisal fees and application fees wait until the borrower has seen the estimate and said they want to move forward.

The intent to proceed can be communicated in different ways, and the lender documents it. It is a signal that the borrower wants this lender to continue, and it creates no obligation to close the loan.

Reading page one

The first page is the summary:

  • Loan Terms. The loan amount, interest rate, and monthly principal and interest, each with a yes or no answer about whether it can increase after closing. It also shows whether the loan has a prepayment penalty or a balloon payment.
  • Projected Payments. The payment broken into principal and interest, mortgage insurance, and estimated escrow for taxes and insurance, across the years of the loan. If mortgage insurance ends or the payment can change, this table shows separate columns.
  • Costs at Closing. The estimated closing costs and the estimated cash to close, each summarized in one figure.

The top of the page also shows whether the rate is locked, and if so, until when. If the rate is not locked, the estimate reflects a rate that can still change.

Reading page two: the costs

Page two breaks closing costs into lettered sections:

  • A. Origination charges, the lender's own fees, including any discount points.
  • B. Services you cannot shop for, such as the appraisal and credit report, chosen by the lender.
  • C. Services you can shop for, such as title services and survey, where the borrower may choose a provider.
  • E. Taxes and other government fees, such as recording fees.
  • F. Prepaids, such as homeowners insurance premium and prepaid interest.
  • G. Initial escrow payment at closing, the deposit into the escrow account for future tax and insurance bills.
  • H. Other, such as owner's title insurance or HOA transfer fees.

Sections A, B, and C together are loan costs, and E through H are other costs. The Calculating Cash to Close table at the bottom then combines closing costs with the down payment, deposit, seller credits, and other adjustments to estimate what the borrower brings to the table.

Discount points and lender credits each have their own labeled places. Points appear in section A as a percentage of the loan amount. A lender credit reduces closing costs and shows in the cash to close calculation. Comparing two estimates means checking both.

Reading page three

The third page includes comparison figures:

  • In 5 Years, showing the total paid and the principal paid down over the first five years.
  • APR, the cost of credit expressed as a yearly rate including certain fees.
  • Total Interest Percentage, the total interest over the loan term as a percentage of the loan amount.

It also lists other considerations, such as whether the lender intends to service the loan, whether the loan is assumable, and whether homeowners insurance is required.

A good-faith estimate with rules

The Loan Estimate is an estimate, but it is governed by tolerance rules that limit how much certain charges can increase by closing. Some fees cannot increase at all. Some can increase only within a 10 percent combined limit. Others can change because they depend on facts that move, such as the insurance premium or the closing date.

When a real event changes the loan, such as a rate lock, a change in loan amount after the appraisal, or a borrower-requested change in program, the lender may issue a revised Loan Estimate. A revision tied to a lock reflects new rate and point figures. It shows the facts moved. The first estimate was accurate for the facts it had.

If the borrower chooses a provider for a shoppable service, the lender gives a written list of providers. Using a provider from that list keeps the fee in the 10 percent group. Using one off the list moves it to the group that can change.

The Loan Estimate also has a seven-business-day relationship to closing. The lender must deliver it or place it in the mail at least seven business days before consummation, counting business days the way the Closing Disclosure rule does.

Comparing estimates

When comparing estimates from more than one lender:

  • Make sure each is for the same loan amount, program, term, and lock status.
  • Compare the rate together with section A and any lender credit, because rate and points trade against each other.
  • Compare the cash to close figure, and look at what drives it.
  • Check page three for APR and the five-year cost.
  • Treat differences in third-party fees with care. Title, insurance, and taxes are set by the provider or the government, so a lower guess on one estimate usually narrows at closing. Lender fees in section A and the rate are what each lender actually controls.

When the estimate expires

A Loan Estimate does not stay valid forever if the borrower never responds. If the borrower has not indicated an intent to proceed within ten business days after the estimate is delivered or mailed, the lender is no longer bound by the original figures and can issue a new estimate. A locked rate also carries its own expiration date, shown on page one. A buyer who gets an estimate early and then waits weeks to write an offer should expect a fresh one once there is a contract.

Common misunderstandings

The Loan Estimate arrives early in the process. The Closing Disclosure arrives near the end. They are designed to be compared.

The cash to close on the estimate is a good-faith figure, inside the tolerance rules, and it moves when the facts move. The Closing Disclosure is the number to wire from.

The rules behind each deadline

  • Application. The six items that make an application are defined in 12 CFR 1026.2(a)(3)(ii).
  • Delivery. The Loan Estimate must be delivered or placed in the mail no later than the third business day after the application, and no later than the seventh business day before consummation (12 CFR 1026.19(e)(1)(iii)).
  • Fees before the estimate. Other than a bona fide and reasonable credit report fee, no fee may be charged until the consumer receives the estimate and indicates intent to proceed (12 CFR 1026.19(e)(2)(i)).
  • Expiration. If the consumer does not indicate intent to proceed within 10 business days after the estimate is delivered or mailed, the lender may issue a revised one (12 CFR 1026.19(e)(3)(iv)(E)).
  • Form content. What appears on each page is set by 12 CFR 1026.37. The CFPB's Loan Estimate explainer walks through it.

Where to go next

For which costs can change before closing, see fee tolerances and changed circumstances. For why two estimates for the same loan on the same day can differ, see why quotes differ.

Next step

If you have two or more Loan Estimates and want them compared line by line on the same terms, send them to me and I will show you which differences are real. Book a call, or start an application.

Related questions

Sources

Links checked Oct 21, 2026.

About the author: McKade Lively, NMLS 2704474, American Pacific Mortgage Corporation dba True North Home Loans, NMLS 1850.

Equal Housing Opportunity.

Last reviewed: Oct 2026

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McKade Lively, NMLS #2704474. Equal Housing Opportunity.