As you are shopping for a house, you’ve probably spent some time looking at rates or getting quotes from lenders. While this may give you a general idea of your options, it’s not always accurate. Instead, trying getting a Loan Estimate.

 

The Consumer Financial Protection Bureau created a standardized form in 2015 known as a Loan Estimate to protect homebuyers. Loan Estimates are legally required to look identical no matter the loan officer. This makes easier for you to compare loan offers and it makes it harder for lenders to hide fees.

 

Get your Estimate

In order to get a Loan Estimate, you will need your name, income, social security number, desired loan amount, desired property address, and its listing price. A lender is legally required to share a Loan Estimate within 3 days after you pass this information along.

 

Comparing

General terms of your loan are outlined on the first page of our Loan Estimate. Make sure the interest rate and loan amount match what you selected or discussed with your lender.

 

The second page is where things get a little trickier. Pay attention to Sections A and B: origination charges and services you cannot shop for. These numbers vary by lender and will impact your monthly payments and the amount of cash due at closing.

 

Sections A & B: These fees vary by lender, they are the ones you want to compare

Section A: Here is where you will see points if you have decided to purchase a lower rate or credits if a lender has offered you a discount. Section A is also where you could see underwriting, processing, or origination fees.

 

Section B: Pay close attention to your appraisal here. Your appraisal makes sure your house is worth what the seller claims it’s worth.

 

Sections C, E, F, G: These fees are third-party, they are similar across all estimates

No matter which lender you go to, your third-party fees will remain the same. If you see an issue in these sections, it may be a sign that your lender is not being upfront about the cost of your loan.

 

Please note: Section C could differ if your lender has a relationship with a title company.

 

Loan Estimates were made to make your life a little easier, but it can still be a little tricky to understand. We are here to simplify the process, remove the stress, and help you find the best option for your financial situation. Visit our website for more information: www.usa-mortgage.com.