This educational sample shows how to read the major sections of a Loan Estimate. It is not a quote, approval, disclosure or offer of credit. Your lender-issued Loan Estimate will contain your actual transaction terms and estimates.
These items describe the basic loan terms. Always use the lender-issued LE for actual terms.
Mortgage insurance can apply to FHA and some Conventional loans. VA financing does not use monthly mortgage insurance, though other program charges may apply.
Loan costs and other costs are itemized so you can see where the estimate comes from.
This section combines the transaction pieces. Credits, deposits and financed items can change the amount.
Closing costs can include lender charges, appraisal, title/settlement services, recording charges and other transaction costs. Prepaids and initial escrow funding can include homeowners insurance, property taxes, prepaid interest and amounts placed into an escrow account. These are different categories even though both can affect cash needed at closing.
Review the lender-issued Loan Estimate carefully and ask questions about any charge or assumption you do not understand.
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