According to the CFPB, the Loan Estimate is “a three-page form that you receive after applying for a mortgage.”
You will receive a Loan Estimate when you are given the mortgage application to sign. It is a three-page document that provides important details on the loan that you are applying for. Those details include the estimated interest rate, a breakdown of your monthly payment, a breakdown of closing costs, as well as information on escrows such as real estate tax and homeowner’s insurance figures.
It’s important to understand that the Loan Estimate is neither an approval nor a denial of credit, but rather is an overview of the loan that you are being offered. Your file will still need to be Processed and reviewed by an Underwriter to be approved. See our previous post about the Loan Process for more information on that process.
For more information on the Loan Estimate and to see what it looks like, the CFPB has a great interactive Loan Estimate with tips on how to read it here!