Loan estimate
A three-page federal form the lender sends within three business days of a full application. It lists the rate, monthly payment, and estimated closing costs so buyers can compare offers.
Your Room opens on showings and offers, with everything before the listing already ticked.
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See how it worksWhere this comes up: on the market
Part 1 of 5
Why a seller cares
The Loan Estimate is what a buyer gets within three days of applying, and it is often what a serious buyer has in hand at offer time. Seeing one, or a preapproval based on one, tells you a lender has real numbers.
Part 2 of 5
A simple example
The buyer's Loan Estimate shows a $240,000 loan at 6.5%, a $1,517 payment, and about $7,000 in closing costs.
| The document | What it says about the buyer |
|---|---|
| Loan Estimate | They applied with a lender and got real terms in writing |
| Preapproval letter | The lender reviewed their finances and named a ceiling |
| Prequalification | They told a lender some numbers; nothing was verified |
The Loan Estimate is a lender's real quote on a real application, which is more than most offers carry.
Part 3 of 5
What people get wrong
That the Loan Estimate is the seller's to see. It is the buyer's document; sellers usually see a preapproval instead.
Part 4 of 5
Common questions
What is a Loan Estimate?
A three page form a lender gives a borrower within three business days of a loan application. It lists the loan's rate, monthly payment and estimated closing costs.
Does the seller see the buyer's Loan Estimate?
Usually not. It is the buyer's document. A seller sees its effects instead, in the financing terms of the offer and in the timing of the closing.
How is it different from the Closing Disclosure?
The Loan Estimate comes at the start of the loan and the Closing Disclosure at the end. For most home loans the buyer must receive the Closing Disclosure at least three business days before signing.
Part 5 of 5 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · read against CFPB: what is a Loan Estimate? · how we research and check what we publish
In your Room, this word explains itself where it appears.
Your Room defines loan estimate in the step you meet it in, beside the document or the date it belongs to. Free to set up, with an agent or on your own.
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