A Loan Estimate is a standardized three-page form that a lender must give you within three business days of receiving your application. It shows your rate, monthly payment, closing costs and cash to close, in the same format at every lender, so you can compare offers line by line. It is not an approval and it is not a commitment to lend.
When you get one
Under federal rules, an "application" is triggered once a lender has six pieces of information: your name, income, Social Security number, the property address, an estimate of its value, and the loan amount you want. Shopping before you have a property? Many lenders will give you a worksheet in a similar format. Once you have an address, ask for the official Loan Estimate.
Page 1: the summary
- Loan terms: loan amount, interest rate, and monthly principal and interest. It also states whether any of these can increase after closing, and whether there is a prepayment penalty or balloon payment. Read those yes or no answers.
- Rate lock: whether your rate is locked and until when. If it says no, the rate can still move. See Rate Lock vs Float.
- Projected payments: principal and interest, mortgage insurance, and estimated escrow for taxes and insurance, including how the payment changes when mortgage insurance ends or an ARM adjusts.
- Costs at closing: total closing costs and estimated cash to close.
Page 2: closing cost details
This is where you compare lenders.
- Section A, Origination Charges. The lender's own fees and any points. This is the most important line for comparison.
- Section B, Services You Cannot Shop For. Appraisal, credit report, flood certification and similar items the lender chooses.
- Section C, Services You Can Shop For. Usually title and settlement. In Arizona the buyer and seller often already have a title and escrow company chosen through the purchase contract.
- Section E, Taxes and Government Fees. Recording fees. Arizona does not charge a real estate transfer tax.
- Section F, Prepaids. Homeowners insurance for the first year, prepaid interest, and sometimes property taxes.
- Section G, Initial Escrow Payment. Cushion months for taxes and insurance. See Escrow Accounts Explained.
- Calculating Cash to Close: down payment, closing costs, deposits and credits, netted to one number.
Sections F and G will vary between lenders because they are estimates of the same bills. Do not let a lender win your business by underestimating them.
Page 3: comparisons and fine print
- In 5 Years: total paid and principal paid down over five years. A quick way to compare two offers with different fees.
- APR and Total Interest Percentage. See APR vs Interest Rate.
- Assumption, servicing, late payment terms.
Which numbers can change before closing
Federal tolerance rules limit how much the estimate can rise:
- Zero tolerance: the lender's own fees and points generally cannot increase unless there is a valid change in circumstances, such as a change in loan amount, program, or an expired rate lock.
- 10% cumulative tolerance: certain third-party fees, including recording fees and services you chose from the lender's list.
- No limit: prepaids, escrow deposits, and services you shopped for yourself off the list.
If something changes, the lender issues a revised Loan Estimate. If a fee rises beyond tolerance without a valid reason, the lender must cure it.
The three lines to compare between lenders
- Section A, Origination Charges.
- The interest rate, for the same lock period.
- The "In 5 Years" figure.
Everything else is mostly estimates of the same bills. Then read the Closing Disclosure against it when it arrives.
Why ask me
- I answer the question before I sell you anything. If renting, waiting or a different program is the better move, I will say so.
- Real numbers, not a calculator guess. I price your actual scenario, side by side, with the fees on the page.
- Every program under one roof. Conventional, FHA, VA, jumbo, and non-QM options like bank statement, DSCR and asset-based loans, so the program fits you instead of the other way around.
- You talk to the principal. Ricky Khamis is President of EPiQ Lending, NMLS #173141, lending in Arizona since 1999 and a 2025 Presidents Club Winner at CMG Home Loans. Direct line: (480) 999-9842.
EPiQ Lending is NMLS #1936984, at 7975 N. Hayden Road, Suite A-101 in Scottsdale. Verify all of it before you trust any of it: Ricky's EPiQ Lending profile, the Scottsdale branch, and the license itself at NMLS Consumer Access. Hold every lender to that standard, including us.
More plain-English answers in the Mortgage Education library.
Equal Housing Opportunity. This is general information, not a commitment to lend or an offer to extend credit. Program guidelines, eligibility requirements and documentation standards vary by investor and change over time. Rates, terms and program guidelines change and depend on credit approval, property appraisal and other qualifying factors. Not all applicants will qualify. This is not legal or tax advice; consult a qualified professional about your own situation.
Find out which program actually costs you less
FHA, conventional and jumbo price the same borrower very differently once the mortgage insurance is compared across the years you will own the home. Tell me the shape of your file and I will run them side by side.
Looking at a specific home? Send me the address and I will run the numbers: rickykhamis.com/analyze
