Loan Estimate
A standardized federal disclosure form provided by the lender within 3 days of loan application, detailing estimated loan terms, interest rate, monthly payment, and closing costs.
When Its Used
Must be provided within 3 business days of a complete loan application. Allows borrowers to compare offers from different lenders.
Key Sections
Loan terms (amount, rate, monthly payment); Projected payments; Closing costs breakdown; Cash to close; Loan features (prepayment penalty, balloon); Comparisons
Common Mistakes
Not reviewing carefully; Confusing with Closing Disclosure; Not comparing LE from multiple lenders; Ignoring cash to close estimate
Pro Tip
Compare the LE to the final Closing Disclosure for changes. Use it to compare offers from different lenders. Pay attention to the cash to close estimate.
