Look out for revised Loan Estimates
As your lender works to verify the information in your loan application, you may receive revised Loan Estimates. These new Loan Estimates indicate that something important has changed about the loan and its costs.
What to do now
Stay alert for communication from your lender
Check your email and postal mail frequently to make sure you don't miss a revised Loan Estimate or other important communications from your lender.
Compare a revised Loan Estimate to the previous one you received
Can you tell what changed? If not, or if you don’t understand why something changed, ask your loan officer right away. Ask:
- Can you explain why I received a new Loan Estimate?
- How is my loan different from what I was originally expecting?
- How does this change my loan amount, interest rate, monthly payment, other loan features, and cash to close?
What to know
Common reasons you may receive a revised Loan Estimate include:
- The home was appraised at less than the sales price.
- Your lender could not document your overtime, bonus, or other irregular income.
- You decided to get a different kind of loan or change your down payment amount.
- You requested a rate lock after the lender issued the original Loan Estimate.
It is illegal for your lender to deliberately underestimate costs on your Loan Estimate
Your lender is allowed to change the costs on your Loan Estimate only if new or different information is discovered in the process (such as the examples above).
- If you think your lender has revised your Loan Estimate for a reason that’s not valid, call your lender and ask them to explain. You can also submit a complaint to the CFPB.
- Learn more about when your costs are allowed to change and by how much.
How to avoid pitfalls
If the appraisal identifies major repairs that are needed, closing could get more complicated
Your lender must send you a copy of your appraisal promptly once it is completed.
- If major repairs (like a new roof) are needed, the lender may require that the repairs be made prior to closing as a condition of getting the loan. Or the lender may ask you to put enough money in a special account to pay for the repair immediately after closing.
- You can always go back to the seller and ask them to pay for some or all of the lender-required repairs, but the seller is not typically required to pay for repairs. If your purchase contract has an inspection contingency, you may be able to cancel the sale.