Costs & Fees
How do I read a Loan Estimate?
The short answer
A Loan Estimate is a standardized three-page federal form your lender must send within three business days of application. Page 1 shows the loan terms, rate, and monthly payment; page 2 itemizes every closing cost; page 3 shows the APR and comparison figures. Because the form is identical across lenders, you can lay two Loan Estimates side by side and compare them fee for fee.
Key points
- Page 1: loan amount, rate, monthly payment, and whether they can change.
- Page 2: all closing costs, split into what you can and cannot shop for.
- Page 3: APR, total interest percentage, and lender comparison.
- It is not an approval or a bill — it is a standardized quote.
Why the form is standardized
The Loan Estimate was created under the TRID rule so consumers could compare mortgages on equal terms. The layout, section order, and definitions are set by regulation, which is what makes cross-lender comparison possible.
Fees you can shop for
Page 2 separates services you cannot shop for (like the appraisal) from those you can (like title services). Shopping the latter can lower your total costs. CandidCost’s Loan Estimate Decoder classifies each line so you know which is which.
Common questions
- Is a Loan Estimate a commitment?
- No. It is a good-faith estimate of terms and costs. Certain figures are protected by tolerance rules and cannot increase beyond set limits at closing without a valid reason.
Put this to work
Sources
Every claim above traces to a public government source.