When you apply for a mortgage, you receive many documents—one of which is a loan estimate. Be sure you carefully review this vital three-page document. It’s essentially your guide to the mortgage you’re applying for. And if you don’t receive one, speak up! By law, your lender must provide you a loan estimate within three days of receiving your application.
Why is the Loan Estimate So Important?
Your loan estimate gives you important loan information, such as
- The estimated interest rate
- Monthly payment
- Total closing costs for the loan, broken down by line item
- Estimated costs of taxes and insurance
- How the interest rate and payment may change in the future
- Special loan features you need to be aware of (such as whether there is a penalty for paying off the loan early)
- Plus many more loan details
Fortunately, the loan estimate is an easy-to-read and understand document that isn’t filled with complicated legal jargon. In fact, all lenders are required to use the same standard loan estimate form, which makes it easy for you to compare loans.
Keep in mind that just because you receive a loan estimate, this does not mean your loan is approved or denied yet. It just means your application has been accepted. The loan estimate is there to show you what loan terms the lender expects IF you decide to proceed. Should you decide to move forward, the lender will likely ask you to supply additional financial information.
While applying for a mortgage can be stressful and the amount of documentation you receive can be overwhelming, be sure you carefully review your loan estimate (as well as any other papers you receive from your lender). The more involved and aware you are, the easier the process will be.
When you’re ready to begin your mortgage application. As mortgage bankers, we can help you make the best decision for your needs.
When you’re ready to apply for a mortgage or refinance an existing one, contact us at 707-254-8891 or [email protected]. We can also direct you to the perfect real estate agent to help you.
Have Questions, Reach out to me for more information.
Call me at (707) 254-8891
Hilda Hensley Branch Manager – Mortgage Advisor
NMLS id 280206
Benchmark Mortgage
Ark-La-Tex Financial Services, LLC NMLS id 2143
