What Is a Loan Estimate in Real Estate?

A Loan Estimate is a three-page document your lender must provide within three business days of receiving your mortgage application. It breaks down your interest rate, monthly payment, and closing costs — helping you compare offers before committing.

1. What a Loan Estimate Includes

Your Loan Estimate summarizes key numbers: loan amount, interest rate, estimated taxes, insurance, and closing costs. Review this carefully to understand your total cost of borrowing and to spot any unexpected fees.

2. How to Use It for Comparison

Use the Loan Estimate to compare lenders side by side. Even small differences in rate or fees can lead to big savings. Before requesting estimates, make sure you have mortgage pre-approval — it helps lenders give you accurate numbers.

3. Why Accuracy Matters

While a Loan Estimate isn’t a binding contract, lenders must honor the terms unless your financial situation changes. Always check for consistency between your estimate and final locked-in mortgage rate before closing.

4. Common Fees You’ll See

Expect to see origination charges, appraisal fees, title insurance, and prepaid taxes. Understanding these items helps you compare true loan costs — not just the advertised interest rate.

Looking for more real estate terms? Visit our What Is in Real Estate glossary for plain-English definitions of key FSBO and MLS concepts.