Page 1: Loan Terms and Projected Payments
The top of page 1 confirms the loan amount, interest rate (and whether it is fixed or adjustable), monthly principal and interest payment, and whether the loan has a prepayment penalty or balloon payment. The Projected Payments table shows your full monthly payment broken down by principal and interest, mortgage insurance, and estimated escrow.
Page 2: Closing Cost Details
Section A shows origination charges -- the lender's fees that cannot change between the Loan Estimate and the Closing Disclosure without a valid changed circumstance. Section B shows services you cannot shop for (appraisal, credit report). Section C shows services you can shop for, including title insurance and settlement agent fees -- shopping these can save hundreds to thousands of dollars.
Comparing Loan Estimates Across Lenders
Compare: the interest rate on page 1, the APR on page 3, the total origination charges in Section A, and the total closing costs on page 2. Use the APR to normalize rate-vs.-fee trade-offs across lenders offering different combinations of rates and points.
Page 3: APR and Total Interest Percentage
Page 3 shows the APR and total interest percentage (TIP -- total interest as a percentage of the loan amount over the full term). The TIP on a 30-year fixed mortgage will always be large; compare it across loan offers of the same type to confirm the math is consistent.
Comparing Your Loan Estimate to the Closing Disclosure
By law, certain Loan Estimate figures -- lender origination charges, transfer taxes, and fees for services you did not shop for -- cannot increase on your Closing Disclosure without a valid changed circumstance (such as a change in loan amount or property). Fees for services you shopped for yourself can vary by up to 10% in aggregate. Line up both documents side by side before closing and flag any unexplained increase with your loan officer immediately.
Common Loan Estimate Mistakes
Only looking at the interest rate on page 1. The APR on page 3 and the total closing costs on page 2 together tell the fuller cost story that the headline rate alone does not.
Not comparing Section C shoppable services. Choosing your own title company or settlement agent instead of the lender's default suggestion can save hundreds of dollars.
Frequently Asked Questions
How soon after applying do I get a Loan Estimate? Lenders must provide one within three business days of receiving a complete application, under federal TRID rules.
Is the Loan Estimate binding? Certain fees are protected from increasing without a valid changed circumstance, but the Loan Estimate is not a final approval -- underwriting and appraisal can still affect final terms.