Lending

How to Read Your Loan Estimate and Closing Disclosure

How to read both federal loan forms page by page, the three-day rules, and how to compare offers.

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Talk to Maggie directly: cell (916) 549-3131 (text or call) · maggie@loveyoursurroundings.coMaggie B. Hopkins, NMLS #349517 · Surroundings NMLS #2528307

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What are the Loan Estimate and the Closing Disclosure?

They are two federal forms every lender must use. The Loan Estimate comes after you apply and shows the loan you're being offered. The Closing Disclosure comes before you sign and shows the final terms. Because every lender uses the same forms, you can line offers up side by side.

Think of the Loan Estimate as the menu and the Closing Disclosure as the receipt you check before paying. Your job is to make sure the receipt matches what you ordered.

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When do you get a Loan Estimate, and what does it take?

The CFPB says (page last modified August 14, 2024) a lender must give you a Loan Estimate within three business days of receiving your application. An application, for this purpose, is six pieces of information. The CFPB lists them on a separate page (last modified April 29, 2024):

Your name
Your income
Your Social Security number, so the lender can check credit
The address of the home
An estimate of the home's value
The loan amount you want

The same page says a lender or mortgage broker can't require documents, such as pay stubs, before giving you a Loan Estimate. Sharing them anyway makes the estimate more accurate. The CFPB toolkit (last updated July 2026) adds that before you say you want to proceed, lenders can charge only a small fee for your credit report. A Loan Estimate is not an approval, and you haven't committed to anyone.

How do you read page 1 of the Loan Estimate?

The CFPB's Loan Estimate explainer (modified October 29, 2025) covers each part:

Loan terms. Loan amount, rate, and monthly principal and interest. Check for a prepayment penalty or a balloon payment. The CFPB calls those risky features.
Projected payments. Your estimated total monthly payment, including mortgage insurance and escrow for taxes and insurance. On an ARM this table shows how high the payment could go.
Costs at closing. Estimated closing costs and estimated cash to close.
Rate lock. Near the top, it says whether your rate is locked and until when. See rate locks and points.

Check that your name, the loan type and the loan amount match what you discussed.

How do you read page 2, the closing cost details?

Page 2 lists every cost. The CFPB toolkit explains the sections that matter most:

A. Origination charges. What the lender or broker charges, including points.
B. Services you cannot shop for. Required services the lender picks.
C. Services you can shop for. Required services where you may choose the provider.
D. Total loan costs. A, B and C added up.
Other costs. Taxes and government fees, prepaids and your initial escrow deposit.
J. Total closing costs, including any lender credits.

The bottom of page 2 shows how your cash to close is figured. Our closing costs page explains each item in plain words.

How do you read page 3?

Page 3 has the comparisons. The CFPB toolkit explains each one:

In 5 years. What you'd pay in total over the first five years, and how much principal you'd pay off. This is often the most useful number if you may move or refinance.
APR. Your costs over the full term, expressed as a rate.
Total Interest Percentage (TIP). Total interest over the loan term as a percentage of the loan amount.

The toolkit notes that a low APR or TIP can still hide high early costs, so check the five-year figure too. Page 3 also names the loan officer. The CFPB suggests looking them up in the NMLS database. It also shows late fees, whether the loan can be assumed and whether the servicer may change.

How do you compare Loan Estimates from different lenders?

The CFPB toolkit suggests getting at least three offers in writing. To make them truly comparable:

Ask for them on the same day, for the same loan type, amount and lock period.
Ask for the same number of points or credits from each.
Compare Sections A and B for lender pricing. Section C can be shopped separately.
Compare cash to close and the monthly payment on page 1.
Compare the "In 5 years" total on page 3.

The CFPB's page on comparing offers (last modified December 12, 2024) says other lenders' Loan Estimates are often your strongest bargaining tool. As a mortgage broker, Maggie lines up several approved lenders for you. Bring any other Loan Estimate and we'll go through it with you.

Which costs can change between the Loan Estimate and closing?

The CFPB explains the limits (page last reviewed September 11, 2024). Costs fall into three groups:

Can't increase without a change in circumstances: fees paid to the lender, the mortgage broker or their affiliates for required services. The same goes for required services you weren't allowed to shop for, and for transfer taxes.
Can increase up to 10% in total: recording fees, and required third-party services from the lender's written list.
Can change by any amount: prepaid interest, insurance premiums, initial escrow deposits, services you shopped for from a provider not on the lender's list, and optional services.

A change in circumstances can reset these, such as a new loan type, a different down payment or an appraisal that comes in higher or lower. If a cost rises past the limit without one, the CFPB says you're entitled to a refund of the excess. When you get a revised Loan Estimate, the toolkit suggests asking why, and how it changes your loan amount, rate, payment and cash to close.

What is the Closing Disclosure, and what is the three-day rule?

The CFPB says (page last modified September 6, 2024) you must receive your Closing Disclosure at least three business days before you close. Use those days to compare it with your Loan Estimate and ask about anything that changed.

The CFPB's Closing Disclosure explainer (modified October 10, 2023) describes its five pages:

Loan terms, projected payments, costs at closing and cash to close.
Closing cost details, including prepaids, the escrow deposit and lender credits.
The cash to close calculation and the summary of the purchase, including seller credits.
Loan features such as late fees, escrow account details and whether the loan can be assumed.
Total of payments, finance charge, APR, TIP and contact details.

Some late changes restart the three-day clock. Federal rules (Regulation Z, 12 CFR 1026.19(f)(2)(ii), checked October 22, 2026) name three: the APR becomes inaccurate, the loan product changes, or a prepayment penalty is added. If you're refinancing your home, the CFPB toolkit notes you generally have three days to cancel after receiving proper notice of your right to rescind. That right does not apply to a purchase loan.

How do you start with a Loan Estimate you can trust?

Fill out the loan options form or call Maggie's cell at (916) 549-3131. Maggie will request Loan Estimates from several approved lenders for the same loan and walk you through them. When your Closing Disclosure arrives, we check it against the Loan Estimate with you before you sign. The mortgage process page shows where each form fits in the timeline.

Frequently Asked Questions

How soon do I get a Loan Estimate?

The CFPB says a lender must provide one within three business days of receiving your application: your name, income, Social Security number, the home's address, its estimated value and the loan amount.

When do I get my Closing Disclosure?

At least three business days before closing, per the CFPB. Compare it with your Loan Estimate and ask about anything that changed.

What restarts the three-day waiting period?

Under federal rules, a new three-business-day wait applies if the APR becomes inaccurate, the loan product changes or a prepayment penalty is added.

Can a lender charge me before I get a Loan Estimate?

Only a small fee for your credit report, according to the CFPB toolkit. Other fees, such as the appraisal, wait until you tell the lender you want to proceed.

Am I committed once I get a Loan Estimate?

No. The CFPB toolkit says you aren't committed to any lender until you sign final closing documents.

What is the most useful number for comparing offers?

It depends on your plans. If you may move or refinance, the In 5 years figure on page 3 is often the clearest. Also compare Sections A and B on page 2 and the cash to close on page 1.