Compare Loan Estimates side by side

Ask for estimates that can actually be compared

Comparisons only work when the requests match. Before you contact lenders, decide on:

• the loan type, such as conventional, FHA, VA or USDA (see mortgage loan types);
• the loan term, such as 15 or 30 years;
• fixed or adjustable rate;
• the down payment and therefore the loan amount;
• whether you want to pay points, receive lender credits, or neither.

The CFPB adds a practical point about points and credits: when comparing offers from different lenders, ask for the same amount of points or credits from each lender. Otherwise one lender's lower rate may simply reflect money you pay at closing.

Try to collect estimates over a short window. Rates move, and the CFPB notes they can change daily or even hourly, so estimates issued a week apart may not reflect the same market.

Page 1: loan terms and payments

Start with the basics and check they match what you asked for.

Loan amount. For a purchase, the CFPB suggests checking that the loan amount plus your down payment equals the sale price. If it does not, ask why.

Interest rate and lock. The CFPB notes that some lenders lock your rate as part of issuing the Loan Estimate and some do not. The form shows whether the rate is locked. An unlocked rate on one estimate and a locked rate on another are not equal offers. See rate locks.

Adjustable features. If the column says "YES" next to features that can increase after closing, your rate or payment can change. Make sure that matches what you expected.

Risky features. The CFPB labels two features as risky: a prepayment penalty, which lets the lender charge a fee if you pay off early, and a balloon payment, a final payment much larger than the regular ones. If either appears, ask the lender about other options.

Projected payments. The principal and interest amount is not your full monthly cost. The CFPB explains that the Estimated Total Monthly Payment usually adds taxes and insurance, and that mortgage insurance is typically required if your down payment is less than 20 percent. Check whether property taxes and insurance are escrowed or not; if not, you will pay them yourself, often in large lump sums. See escrow accounts.

Page 2: closing costs, section by section

Section A, origination charges. The CFPB calls these upfront fees charged by your lender "an important part of the cost of your loan." Lenders may itemize them differently: application, origination, underwriting, processing, verification or rate-lock fees. The CFPB's advice is to look at the total. Points also appear here.

Section B, services you cannot shop for. These are third-party services the lender requires and chooses, such as an appraisal. Because you cannot shop for them separately, compare the overall cost of this section across lenders.

Section C, services you can shop for. Also required, but you can choose the provider. The CFPB says the lender should give you a list of approved providers, and that you can look for others but should check with the lender about any provider not on the list.

Sections E to H, other costs. Taxes and government fees, prepaid items, initial escrow payment and other costs. The CFPB points out that homeowners insurance is set by the insurer you choose and property taxes by your local government, not the lender. Check whether the lender's estimates are realistic for the property; your local tax authority can help.

Lender credits. If an amount appears here, the CFPB explains, the lender is giving you a rebate toward closing costs, and you may be paying a higher interest rate in exchange. Make sure that was your choice. See points and lender credits.

Page 3: comparisons and other considerations

Page 3 includes a comparisons section and estimated cash to close. The CFPB says your Estimated Cash to Close includes your down payment and closing costs, minus deposits already paid and any agreed seller contribution. It is usually paid by cashier's check or wire transfer, and the lender will need to document where the funds come from. Before closing day, read protecting closing funds from wire fraud.

Build a one-page comparison

Make a simple table with one column per lender and these rows:

1. Loan type, term, fixed or adjustable
2. Interest rate, and whether it is locked until a stated date
3. Points (cost) or lender credits (amount)
4. Section A total
5. Section B total
6. Section C total, noting whether you could shop for a lower price
7. Estimated total monthly payment
8. Estimated cash to close
9. Any prepayment penalty, balloon payment or adjustable features

Then ask the question the CFPB suggests in its points guidance: over the realistic number of years you might keep this loan, which offer costs less overall? A lower rate with high upfront costs can be the better deal over many years, and the worse deal if you sell or refinance soon.

Questions to put to each lender

• Is this rate locked? If not, when would you lock it, and what does a lock cost?
• What exactly is in Section A, and can any of it be reduced?
• Why is this service in Section B rather than Section C?
• Are taxes and insurance escrowed? On what figures are they based?
• If I ask for an estimate with no points, what changes?

Write the answers next to the numbers. A lender's willingness to explain clearly is useful information too.

Keep the estimates

Keep every Loan Estimate you receive. When the Closing Disclosure arrives before closing, the CFPB's closing tools suggest comparing it against your most recent Loan Estimate. The earlier estimates are the record of what you were offered.

Forms, rules and the CFPB's explanations can change. Check the CFPB's current Loan Estimate explainer before you compare offers.