By the Wirly Editorial Team | AI-assisted, human-reviewed
A Loan Estimate is a standardized three-page form that lenders must provide within three business days of receiving your mortgage application. It shows the estimated interest rate, monthly payment, and closing costs.
The Loan Estimate was introduced in 2015 to make it easier for borrowers to compare offers from different lenders. Every lender uses the same format, so you can line up key numbers side by side. The form includes your loan terms, projected monthly payments, estimated closing costs, and other costs over the life of the loan.
You are not obligated to accept a loan from a lender that provides a Loan Estimate, and requesting one should not affect your credit score if done within a standard rate-shopping window (typically 14 to 45 days, depending on the scoring model). Getting Loan Estimates from at least three lenders is one of the most effective ways to save money on a refinance.
Pay close attention to the total closing costs, the APR (which includes fees), and the cash to close amount. The Loan Estimate also shows estimated property taxes and insurance, but these are estimates and may differ from the final Closing Disclosure. Use the Loan Estimate as a comparison tool, not a final commitment from the lender.
A Closing Disclosure is a five-page form that details all final terms of your mortgage, including the interest rate, monthly payments, closing costs, and cash needed to close. Lenders must provide it at least three business days before closing.
APR (Annual Percentage Rate)The annual percentage rate is the total yearly cost of borrowing, including interest and fees, expressed as a percentage. APR gives you a more complete picture of loan cost than the interest rate alone.
Closing CostsClosing costs are the fees and expenses you pay when finalizing a mortgage, typically ranging from 2% to 5% of the loan amount. They include lender fees, appraisal costs, title insurance, and government recording charges.
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