Free Loan Estimate Review

The Plain-English LE Guide

How to read your Loan Estimate

The Loan Estimate (LE) is a 3-page disclosure that lenders are required by federal law (the TILA-RESPA Integrated Disclosure rule, or “TRID”) to send within 3 business days of receiving your mortgage application. Every lender uses the same format, so you can compare offers apples-to-apples — whether they came from a bank, a credit union, a retail lender, or a wholesale-channel broker like HomePilot.

The CFPB explicitly recommends shopping at least three lenders. Multiple credit pulls within a 14-45 day window count as a single inquiry on your FICO score, so there’s no FICO downside to comparing. The differences across lenders for the same scenario are routinely $5,000-$15,000 over the life of the loan.

Page 1 — Loan Terms, Projected Payments, Costs at Closing

The top-right metadata box on page 1 carries the basics: Loan Term (typically 30 yr), Purpose (Purchase / Refinance / Cash-out), Product (Fixed Rate / 5/1 ARM / etc.), Loan Type (Conventional / FHA / VA / USDA), and Rate Lock (yes/no + expiration date). The Sale Price sits in this box too — not in the “Loan Terms” section below it.

The Loan Terms box itself shows the loan amount, interest rate, and monthly principal & interest, plus disclosures about prepayment penalties and balloon payments (rare on conventional loans).

Projected Payments shows the payment breakdown by year. For a fixed-rate loan with no temporary buydown, every year looks the same. For a buydown or an ARM, this section is where the changing-payment math lives — including any mortgage insurance and escrow estimate.

Costs at Closing gives the two bottom-line numbers most borrowers focus on: Estimated Closing Costs (lender fees + third-party + prepaids) and Estimated Cash to Close (closing costs minus deposits and credits, plus down payment).

Page 2 — Closing Cost Details (where the action is)

Page 2 itemizes every fee. Section letters (A through J) are part of the regulated format — every lender’s LE uses the same structure.

• Section A: Origination Charges — Lender-controlled fees, including any discount points line. Wholesale-channel brokers typically charge $0 here because they make their margin from the wholesale rate spread. Retail lenders often charge 0.5%-1% of the loan amount in origination on top of the rate.
• Section B: Services You Cannot Shop For — Appraisal, credit report, flood certification, tax service. Costs are roughly the same across lenders.
• Section C: Services You Can Shop For — Title insurance, escrow, signing fees, recording. You can shop these independently — sometimes saving $1,000-$3,000.
• Section D = A + B + C (Total Loan Costs).
• Section E: Taxes and Other Government Fees — Recording fees and transfer taxes. Set by the county/state; not negotiable.
• Section F: Prepaids — Homeowner’s insurance premium, prepaid interest from closing to month-end, prepaid property taxes.
• Section G: Initial Escrow Payment at Closing — A few months of property taxes and insurance held in escrow as a cushion.
• Section H: Other — Owner’s title insurance (optional but recommended) and miscellaneous items.
• Section I = E + F + G + H (Total Other Costs).
• Section J: TOTAL CLOSING COSTS (D + I) — The bottom-line gross number. Any Lender Credits show as a separate negative line under J and reduce your cash to close.

Page 3 — Comparisons (the apples-to-apples metrics)

In 5 Years — Total you’ll have paid in principal, interest, MI, and loan costs after 5 years, and how much principal you’ll have paid off. Useful for short-tenure homeowners.

Annual Percentage Rate (APR) — Your costs over the loan term expressed as a single annualized rate. Always higher than your note rate by 0.2-0.5% on a well-priced conventional loan; a wider gap usually means heavy fees baked in.

Total Interest Percentage (TIP) — Total lifetime interest as a percentage of loan amount. On a 30-year fixed-rate loan at typical rates, TIP is often 100%+ (i.e., you’ll pay more in interest over 30 years than the loan amount itself).

Red flags worth questioning

• Section A above ~$3,000 on a typical loan size — your lender is padding origination.
• APR-to-rate spread above 0.5% — heavy fees folded into the loan.
• Discount points charged without a meaningfully below-par rate — you’re paying for points that aren’t buying you a real rate reduction.
• Both origination AND heavy points — paying twice.

Loan Estimate vs. Closing Disclosure

The Closing Disclosure (CD) is the 5-page final-terms document delivered three business days before closing. The LE is the lender’s offer; the CD is the final binding contract. Federal law (TRID) requires that the CD’s terms match the LE within tight tolerances — if they don’t, the lender must re-disclose and the 3-day waiting period restarts. Always compare your CD against your LE before signing.

How to use this tool

Two ways. The fast way: attach your Loan Estimate in the form at the top of the page with your name, email, and phone, and a licensed loan officer sends back the line-item comparison, usually the same day. The instant way: type the numbers into the analyzer above and the comparison engine prices the same scenario through today’s wholesale pricing on the spot, telling you whether your LE is fair-market, has questionable lines, or is overcharging. Free, no SSN, no signup, either way.