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Loan Estimate
A standardized document provided by lenders within three days of application, detailing loan terms and estimated costs.
Definition
The Loan Estimate is a standardized three-page form that lenders must provide within three business days of receiving a mortgage application. It details the loan amount, interest rate, monthly payment, estimated closing costs, and other key terms in a format designed for easy comparison across lenders. The Loan Estimate replaced the older Good Faith Estimate in 2015 under TRID (TILA-RESPA Integrated Disclosure) rules. While the figures are estimates, certain fees are subject to tolerance limits — meaning the final closing costs cannot exceed the estimate by more than a specified percentage. Comparing Loan Estimates from multiple lenders is one of the most effective ways to ensure you are getting competitive terms.
Related Terms
Closing Costs
Fees and expenses paid at the closing of a real estate transaction beyond the purchase price.
APR (Annual Percentage Rate)
The annualized cost of a loan including interest and fees, expressed as a percentage.
Origination Fee
A fee charged by a lender or broker for processing and underwriting a new loan.
Interest Rate
The percentage charged by a lender for borrowing money, applied to the outstanding loan balance.
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