Review your Loan Estimates

What to do now

Watch for your Loan Estimates

Once you’ve submitted your six key pieces of information, each lender is required to send you a Loan Estimate within three business days. Allow a few extra days for mail delivery if the lender is using postal mail. If you haven’t received a Loan Estimate within that timeframe, call the lender and ask why. 

Read your Loan Estimates carefully

• Make sure they reflect the loan option that you discussed with the loan officer. If anything seems different, call the loan officer right away to ask why.
  
• Double-check the important details and get help with unfamiliar terms with our interactive guide to the Loan Estimate form.
  

Check to see if your interest rate is locked

Some lenders may lock your rate as part of issuing the Loan Estimate, but some may not. If your rate is not locked, it can change at any time. If your interest rate is locked, your rate won’t change between now and closing, as long as you close within the specified timeframe and there are no changes to your application.

• Check at the top of page 1 of your Loan Estimate to see whether your rate is locked, and until when.
  
• Learn more about what a rate lock is and how it works.
  

If you haven’t already, find out more about the lender’s rate-lock policies

If your rate is not yet locked, ask:

• When in the process do you typically lock interest rates? Could I lock earlier or later, if I wanted to?
  
• What do I need to do to lock my rate? Are there any additional fees to lock my rate?
  
• How many days would I have to close before my rate lock expires?
  
• Are there other rate-lock periods available? How would the pricing on my Loan Estimate change if I wanted a different length of rate lock?
  

Regardless of whether your rate is already locked, ask:

• What happens if I am unable to close in the specified amount of time?
  
• For example, would there be a fee to extend the rate-lock?
  
• How much would that fee be? Is there a chance that the lender would refuse to extend the rate-lock?

What to know

Your loan hasn’t been approved or denied yet

When you receive a Loan Estimate, the lender has not yet approved or denied your loan. This is true even if your rate is already locked. The Loan Estimate shows you the terms the lender expects to offer you if you decide to move forward with your loan application. You have not committed to this lender. In fact, you are not committed to any lender before you have signed final closing documents.

Certain risky features must be highlighted on the Loan Estimate

Certain risky features are listed under Loan Terms on page 1 of the Loan Estimate. If any of these features are included in the loan, ask the loan officer why this feature is included. Ask the lender to give you another Loan Estimate for a loan without the feature, so you can see the difference in costs for a loan with less risk to you.

Can the loan amount increase after closing? 

This is known as negative amortization. It’s a risky feature that can increase the amount of debt you have and the cost of the loan.

Can the interest rate increase after closing?

Adjustable-rate mortgages are riskier than fixed-rate mortgages, but they can be a good choice in some situations. Learn more.

Can the monthly principal and interest payment increase after closing? 

If you’re considering a loan with this feature, make sure your monthly budget can handle the increased payment.

Does the loan have a prepayment penalty?

This means that if you want to sell your home or refinance, you could owe the lender additional money because you paid off the loan early.

Does the loan have a balloon payment? 

This means you need to make a big, lump-sum payment at the end of your loan term. If you are unable to make the balloon payment, unable to refinance your loan, or unable to reset the terms of your loan, you could lose your home.

If you need help reviewing your Loan Estimates, consider contacting a housing counselor

You can find a HUD-certified housing counselor online or by calling 1-800-569-4287.

How to avoid pitfalls

If there are errors on your Loan Estimate, get them fixed

If your name is misspelled, or other key details are wrong, don’t assume they will get fixed at some point along the way. Get them fixed now. Some errors, such as a typo in the address of the property you plan to purchase, may seem minor but are actually major errors that could affect your rate and costs. 

If your Loan Estimate does not reflect what you discussed, ask the loan officer why

If the explanation you receive doesn’t make sense, be wary. Consider working with one of your other lenders instead. You can also submit a complaint to the CFPB.

Don’t let anyone rush you

Take the time to review and compare your Loan Estimates before agreeing to proceed with a particular lender. The time you spend now can save you money and help prevent unpleasant surprises later.