Within three business days of submitting a mortgage application, your lender is required to provide you with a loan estimate. It is a standardized three-page document that lays out the key terms of the loan being offered. Most buyers glance at the monthly payment and the interest rate and move on. That approach leaves a lot of important information unread, and some of it can significantly affect the cost of the loan.

Page One: The Basics

The first page covers the loan terms you should already have discussed with your lender: loan amount, interest rate, monthly principal and interest payment, and whether the rate or payment can increase over time. This is also where you will see the projected total monthly payment, which includes estimated property taxes, homeowners insurance, and any mortgage insurance, all folded into a single number.

That total monthly payment figure is the most realistic picture of what you will actually be paying each month and is worth comparing carefully against your budget rather than looking at principal and interest alone.

Page Two: Closing Costs

Page two is where most buyers should spend more time than they do. It breaks down closing costs into two categories: loan costs and other costs. Loan costs include origination charges, points if any were purchased to lower the rate, and any other fees charged directly by the lender. Other costs cover items like appraisal fees, title services, recording fees, and prepaid expenses like homeowners insurance and prepaid interest.

The total of these costs is what you will need to bring to closing in addition to your down payment, or roll into the loan if you have negotiated that arrangement. Comparing page two across multiple loan estimates from different lenders is one of the clearest ways to identify which offer is genuinely more competitive beyond the headline rate.

Page Three: Comparisons and Contact

The third page includes a useful comparisons section that shows the total cost of the loan over five years, the annual percentage rate, and the total interest percentage over the life of the loan. These numbers put the true cost of the mortgage in perspective in a way that the monthly payment alone does not.

This page also includes contact information for the lender and the loan officer, as well as a confirmation of whether the lender intends to service the loan after closing or sell it to another servicer. That last point does not affect your rate or terms, but it is useful to know in terms of where you will be sending payments once you have moved in.

At Paradise Coast Mortgage, we walk through the loan estimate with every client line by line before anything is signed. The document is designed to protect you, but only if you actually read it.