For most standard purchase mortgages, these two forms provide a consistent way to review loan terms. A prequalification or preapproval conversation is an earlier step; a Loan Estimate follows a mortgage application and is not a loan approval.
At the application stage
What is a Loan Estimate?
A Loan Estimate is a three-page form showing the terms and costs the lender expects to offer. For covered loans, the lender generally must provide it within three business days after receiving the six pieces of information that make up an application. You do not need a signed purchase contract to receive one.
Review the loan amount, rate, whether the rate is locked, loan term and type, projected principal and interest, mortgage insurance, estimated escrow, closing costs, lender credits, and estimated cash to close. An interest rate and an APR are different measures; APR includes certain loan costs and can help with comparisons. Ask whether an offer includes discount points or a lender credit. Compare offers for the same loan type and timeframe when possible.
Before signing
What is a Closing Disclosure?
A Closing Disclosure is a five-page form with the final details of a covered mortgage, including the loan terms, projected payments, closing costs, and cash to close. The lender generally must ensure you receive it at least three business days before closing. Use that review period to ask about any term or fee you do not understand.
Receiving the form is a chance to review it, not a signal that every estimate has to match exactly. Taxes, insurance, prepaid items, escrow deposits, and other details can change as the transaction is finalized. Ask for an explanation of each meaningful difference.
Side-by-side check
What should I compare?
| Check | Question to ask |
|---|---|
| Loan terms | Do loan amount, loan type, term, rate, and any rate lock match what I agreed to? |
| Monthly payment | What includes principal, interest, mortgage insurance, and escrow? What taxes, insurance, HOA dues, or assessments will I pay separately? |
| Closing costs | Which lender charges, points, third-party fees, prepaids, and escrow deposits changed, and why? |
| Cash to close | How do down payment, deposits already paid, seller credits, lender credits, and closing costs lead to the final amount? |
| Loan features | Is the rate adjustable? Could payments increase? Is there a prepayment penalty or balloon payment? |
Closing costs and cash to close are not the same number. Cash to close accounts for the down payment, credits, deposits, and other adjustments in addition to closing costs. Confirm the final amount and secure delivery instructions with your closing team.
Questions before closing
What if the figures changed?
Contact your loan officer and settlement agent promptly. Ask which event caused the change, whether a corrected disclosure is coming, and whether it affects the closing date. Some fees have limits on how much they may increase, depending on the fee and circumstances.
Most corrections do not automatically restart the three-business-day review period. A new period is required if the disclosed APR becomes inaccurate, the loan product changes, or a prepayment penalty is added. Your lender can explain how a particular change is handled. Do not wait until the signing table to raise a discrepancy.
A note about HECM for Purchase and other exceptions
A reverse mortgage such as HECM for Purchase does not use the standard Loan Estimate and Closing Disclosure. It uses different disclosures, including a Good Faith Estimate and HUD-1 settlement statement. Some HELOCs and certain assistance loans also use different forms. Ask which documents and review timeline apply to the specific loan you are considering.
Need help understanding the numbers?
I can walk through a prospective payment and possible loan paths with you. Start with the short questionnaire, then we can discuss the next step for your situation.
Start prequalificationThe questionnaire is an initial conversation, not a mortgage application approval or a commitment to lend.