How to Compare Loan Estimates, Line by Line

If you want to know how to compare loan estimates, start with one fact: every lender uses the same standard form. That was done on purpose, so you can set two or three offers side by side and see real differences instead of marketing. Here is how I walk my clients through it, line by line, so you can do it with confidence whether you work with me or anyone else.

A Loan Estimate is a three-page form that shows the expected terms of a loan you applied for: the interest rate, the monthly payment, the closing costs and the cash you would need at closing. Federal rules require the lender to give it to you within three business days of receiving your application.

One thing it is not: an approval. The CFPB is clear that when you receive a Loan Estimate, the lender has not yet approved or denied your application. It shows what the terms would be if you decide to move forward. For that reason, I tell people to treat it as a price quote that still has to be confirmed by underwriting.

How many Loan Estimates should I get?

The CFPB says to request estimates from multiple lenders but does not set a number. I find that two or three gives you enough to see real differences without getting overwhelmed.

Is the Loan Estimate a commitment to lend?

No. It shows expected terms if you move forward, but the lender has not yet approved or denied your application when you receive it.

Does the smallest closing cost always mean the better loan?

Not always. Points, lender credits, mortgage insurance and the monthly payment all move together, so compare the whole picture, including how long you plan to keep the loan.

What if my Closing Disclosure does not match my Loan Estimate?

Some small differences can be normal, but ask your lender to explain any change you do not understand, especially in the loan terms or closing costs. Do that before closing day, not after.