A Loan Estimate organizes important mortgage terms in a standard format. Compare offers for the same loan scenario and date whenever possible. A low headline rate can be paired with higher upfront costs, so work across the full document.
Compare the whole offer, using consistent assumptions.
Start with the structure
Check the loan amount, loan term, product, purpose, interest rate, and whether the rate is locked. Review the projected payment and whether mortgage insurance or escrow payments are included. Investigate a term you did not request.
Compare the charges that explain the offer
Review origination charges and discount points in Section A. Review third-party services, taxes, prepaid items, and escrow funding separately. Lender credits reduce cash due but may accompany a different rate. Do not treat an estimated tax or escrow difference as a lender price advantage.
Use the comparison section thoughtfully
APR and the five-year figures add context, but they do not replace a comparison based on your expected time in the loan. Ask each lender to explain significant differences and provide a corrected estimate if the scenario is wrong.
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CFPB: Understanding your Loan Estimate ↗General education, not an approval or personalized recommendation. Loan terms and eligibility vary. Our editorial standards.