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According to federal regulations, a lender must provide a Loan Estimate that outlines estimated mortgage terms including interest rate, closing costs and loan features within three business days of the borrower submitting an application to the lender. The Loan Estimate is a standard document that is the same across all lenders, enabling you to compare multiple mortgage proposals more easily. For the example document below, we show a $380,000 fixed rate mortgage with an interest rate of 4.250% and total lender fees of $1,070.
When reviewing a Loan Estimate, the key items to focus on are Interest Rate (top of page 1), Closing Costs (bottom of page 1 with a detailed breakdown on page 2); and, Annual Percentage Rate (APR) (top of page 3). You should submit mortgage applications to or request Loan Estimates from multiple lenders so that you can compare loan terms to find the mortgage that is right for you. In short, this document enables you to understand all the important information about your mortgage. Lenders cannot charge you for submitting a mortgage application or for providing an Loan Estimate. Please note that this is an example Loan Estimate document that should be used for informational purposes only.