Everything You Need to Know About Loan Estimates
June 09, 2023
June 09, 2023
Receiving multiple loan estimates gives homebuyers a better idea of the amount of money they can borrow to purchase a home. Learn more about what loan estimates are and what you need to do to prepare before seeking them out.
A loan estimate is a standardized three-page document that outlines the terms of a proposed loan. Your lender will prepare a loan estimate for you based on information provided in your loan application. The purpose of a loan estimate is to give you the details of a loan before deciding if the loan is right for you.
Before requesting a loan estimate, you should also gain a better grasp of your finances to see how much home you afford.
The form uses plain language and is designed to present information clearly to borrowers. While the loan estimate is not a binding agreement, it should provide an accurate picture of the loan terms your lender intends to offer if you decide to move forward with them.
When reviewing your loan estimate form, you should carefully review the following sections:
Loan estimates will include their expiration date at the top of the first page and are good for ten business days from the original issue date. Given the brief window, we recommend that you request multiple loan estimates from different lenders and shop around to narrow down your lending options.
Borrowers who compare multiple loan estimates are more likely to save money in the long run. Getting multiple estimates will allow to make a more informed decision before selecting a lender and/or loan product.