When you receive it
After you submit a complete enough application, the lender generally has to issue a Loan Estimate within three business days. Because every lender uses the same three-page format, it is the single best tool for comparing offers on equal footing rather than trusting a rate quoted over the phone.
What to review closely
Check the interest rate, monthly payment, whether the rate is locked, estimated cash to close, loan term, and whether features like prepayment penalties or balloon payments appear in the details. Page two breaks out closing costs line by line, which is where lenders often differ the most.
How to use it to compare lenders
The most reliable way to shop is to request Loan Estimates from two or three lenders on the same day, since pricing moves with the market. Line them up side by side and look at the rate, the total lender fees, and the cash to close together. A slightly higher rate with much lower fees can be the better deal if you plan to keep the loan only a few years.
What it does not guarantee
A Loan Estimate is only an estimate. It is not final approval, and it does not hold your pricing unless you have a rate lock in place. Some numbers can still move before closing, especially prepaid items and the fees that disclosure rules allow to change. Treat it as a well-defined starting point, not a contract.