Loan Estimate
The early disclosure that outlines a mortgage offer's rate, payment, and fees.
Definition
A Loan Estimate is the standardized three-page disclosure that shows the proposed interest rate, payment, closing costs, and key loan features shortly after you apply.
Category: Disclosures
When you receive it
After you submit a complete enough application, the lender generally has to issue a Loan Estimate within three business days. It is designed to help you compare lenders using the same disclosure format.
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.
What it does not guarantee
A Loan Estimate is an estimate, not final approval. Some numbers can still move before closing, especially prepaid items and fees allowed to vary under disclosure rules.
Related glossary terms
- Closing Costs - The collection of fees charged to finalize your mortgage and transfer ownership.
- Cash to Close - The final dollar amount you need to wire or bring to closing.
- Rate Lock - A temporary hold on your mortgage interest rate.
Related loan programs
- Conventional Loans - Conventional loans aren't backed by a government agency, follow Fannie Mae and Freddie Mac guidelines, and reward strong credit with the lowest rates and most flexible terms available.
- FHA Loans - FHA loans are insured by the Federal Housing Administration and let you buy with as little as 3.5% down and a 580 credit score, making them a top choice for first-time buyers and credit rebuilders.
- Refinance Loans - Refinancing replaces your current mortgage with a new one — to lower your rate, shorten your term, switch loan types, or pull cash out of your equity. The right refinance depends on your goal, not just current rates.