Costs
Loan Estimate vs Closing Disclosure: how to read and compare them
Quick answer
The Loan Estimate is a three-page form lenders must send within three business days of your application, showing your estimated rate, payment and closing costs. The Closing Disclosure is the five-page final version, delivered at least three business days before closing. Some fees can't increase at all between the two, and others can rise only 10% in total.
These two standard federal forms are your best protection against surprise fees. The Loan Estimate lets you compare lenders on equal terms; the Closing Disclosure lets you confirm you're getting what you were promised. Both use the same layout, so you can line them up side by side.
When you get each
- Loan Estimate (LE): within three business days after you submit an application (name, income, SSN, property address, estimated value and loan amount)
- Closing Disclosure (CD): at least three business days before you sign loan documents
A new three-day waiting period is required only if the APR increases beyond a small tolerance, the loan product changes (for example, fixed to ARM), or a prepayment penalty is added. Other changes can be corrected without delaying closing.
How to read the Loan Estimate
Page 1 shows the loan terms, the projected monthly payment including escrow, and the cash to close. Page 2 breaks down closing costs: Section A (origination charges), B (services you cannot shop for), C (services you can shop for), and E through H (taxes, prepaids, escrow and other). Page 3 shows comparisons: total paid in five years, APR and total interest percentage.
Comparing lenders
Get Loan Estimates from at least two or three lenders on the same day, for the same loan type and lock period. Compare Section A (the lender's own fees) and the interest rate plus points. Sections B and C are mostly third-party fees and will be similar. Use the "In 5 Years" figure on page 3 to see the total cost of each offer.
Which fees can change
| Tolerance | Examples | Can it increase? |
|---|---|---|
| Zero tolerance | Lender origination fees, points (once locked), transfer taxes, services you couldn't shop for | No |
| 10% total | Recording fees, services you could shop for but chose from the lender's list | Up to 10% combined |
| No limit | Prepaid interest, homeowners insurance, escrow deposits, services you chose yourself | Yes, if made in good faith |
If the lender exceeds these limits without a valid reason (a "changed circumstance" such as your requested loan change or a new appraisal finding), it must refund the difference within 60 days of closing.
A real example
A buyer's LE shows $1,295 in origination charges and $1,100 in title fees chosen from the lender's list. On the CD, origination is $1,495 and title is $1,180. The $200 origination increase is a zero-tolerance violation unless there was a changed circumstance. The title increase is about 7%, within the 10% limit. The buyer asks the lender about the $200 and it's refunded as a credit at closing.
What to check on the Closing Disclosure
- Interest rate, loan amount and loan term match your lock
- Monthly payment and escrow amounts
- Lender credits and seller credits are applied
- Earnest money deposit is credited
- Cash to close matches what you've prepared to wire
- Names and property address are spelled correctly
Frequently asked questions
Can I get a Loan Estimate without committing to a lender?
Yes. A Loan Estimate doesn't obligate you. You only commit when you tell the lender you intend to proceed, and lenders can't charge more than a credit report fee before then.
Why is my cash to close different from the down payment?
Cash to close includes your down payment plus closing costs and prepaids, minus your earnest money and any credits.
Who do I call if the Closing Disclosure looks wrong?
Your loan officer first, and your settlement agent for title and escrow items. Raise questions as soon as you receive it, not at the closing table.
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