An example Loan Estimate, every field explained

What you are borrowing: the $340,000 price minus the $34,000 down payment. The NO in the right column answers the printed question, can this amount increase after closing. On a fixed-rate loan it cannot. On some products, like loans with negative amortization, this could say YES, and that word alone is reason to read the form twice.

The note rate: the yearly rate used to compute each month's interest charge. It is not the same as the APR on page 3, and the difference matters when you shop. The note rate sets your payment; the APR (7.091% here) folds the upfront lender charges and mortgage insurance into one yearly figure, so it is higher whenever a loan has costs. Two offers with the same rate but different APRs differ in their fees.

For context, borrowers who closed conventional purchase loans in Hennepin County in 2025 had a median rate near this figure; the Hennepin County page shows the medians and how much they varied by lender.

The scheduled payment on $306,000 at 6.625% over 360 months, before taxes, insurance, and mortgage insurance are added. This is standard amortization arithmetic, so it should be identical on every estimate quoting the same amount, rate, and term; if it is not, something else on the form differs. The Projected Payments table below adds the rest of the monthly bill.

A fee for paying the loan off early, by refinancing, selling, or just paying extra. NO is the answer you want and the answer nearly all conventional loans give today. If this says YES, the form must state the maximum penalty and how long it lasts, and you should ask the lender to price the loan without it before comparing offers.

A large lump sum due at the end of the term. A YES here means the monthly payment does not fully pay the loan off and the balance comes due at once, which usually forces a refinance later at whatever rates then exist. Standard 30-year fixed loans do not have one.

The same fixed payment from the Loan Terms table, shown in both columns because a fixed rate never changes. The table splits into year ranges only when some part of the payment is scheduled to change; here the change in year 10 is the mortgage insurance dropping off.

Because the down payment is under 20 percent, the lender requires private mortgage insurance, about $128 a month on this loan. It protects the lender, not you. Federal law (the Homeowners Protection Act) ends it automatically once the balance is scheduled to reach 78 percent of the home's original value, which happens partway through year 10 on this loan, and you can request cancellation at 80 percent. That scheduled drop is why the table shows two columns.

The monthly deposit toward property taxes and homeowner's insurance, collected with the payment and held in an escrow account: here $340 a month for Hennepin County property taxes and $175 for insurance. These are estimates of bills that belong to the county and your insurer, not to the lender, so they will drift over the years no matter which lender you choose. Do not compare offers on this line.

The full monthly bill: principal and interest, mortgage insurance, and escrow, rounded to the dollar. This is the number to budget against, and the number that drops by about $128 when mortgage insurance ends. When comparing lenders, remember that only the principal and interest and mortgage insurance parts reflect the lender's pricing; taxes and insurance ride along identically everywhere.

Everything it costs to close, split into Loan Costs (what the lender and required services charge, $5,205 here) and Other Costs (taxes, prepaid insurance and interest, and the escrow deposit, $5,699 here). Page 2 itemizes both. The Loan Costs half is where lenders actually differ and where the binding tolerance rules apply; much of the Other Costs half would follow you to any lender. When you have a real estimate in hand, the checkercompares its numbers against your own county's medians.

The check you bring to the closing table: the $34,000 down payment plus the $10,904 of closing costs, minus the $5,000 earnest-money deposit you already paid. The Calculating Cash to Close table on page 2 shows that arithmetic line by line. This is the single most practical number on page 1, and one of the first to compare across offers, because a lower rate is not much use if the cash required to get it is cash you do not have.

Carried down from section J above. The rest of this table builds from costs to cash: what you actually wire or bring as a cashier's check.

Closing costs rolled into the loan balance instead of paid in cash. Zero here, and usually zero on a purchase, where the loan amount is set by the price and down payment. Rolling costs in is more common on refinances; it lowers the cash needed today and raises the balance you pay interest on for decades.

The down payment: $340,000 price minus the $306,000 loan. The 10 percent figure here is what triggers the mortgage insurance on page 1; at 20 percent down that line would vanish, which is worth pricing if you have the choice.

The earnest money you already gave with the purchase agreement, held in trust. It counts toward what you owe, so it subtracts here. Make sure this matches your contract; a missing deposit is a common Loan Estimate error and easy to have corrected.

Cash coming out of the deal to you, which happens on some refinances (cash-out) and essentially never on a purchase.

Money the seller agreed to contribute toward your costs. If your purchase agreement includes one, it must appear here and it directly reduces the cash you need. If you negotiated one and this shows $0, tell the lender to fix it.

Everything else that moves money at closing: property-tax prorations between you and the seller, credits from an agent, and similar items. On this simple example, zero.

A five-year snapshot designed for comparing offers. The first number is everything this loan takes from you in 60 months: 60 payments of principal and interest ($117,561) plus 60 months of mortgage insurance ($7,650) plus the $5,205 of loan costs from section D. The second number is how much of that actually reduced your balance: $19,142, about one dollar in seven. That ratio is not a defect of this loan; it is what a 30-year amortization at this rate looks like early on, when payments are mostly interest.

The five-year frame exists because most people refinance or move long before year 30. When two offers are close, the one with the lower In 5 Years total is usually the better fit for a normal horizon, even if its rate is nominally higher, because it weighs upfront costs the way real life does.

The APR restates the whole cost of borrowing as a single yearly rate. It starts from the 6.625 percent note rate, then folds in the finance charges you pay upfront (the points, underwriting, and processing fees from section A, plus prepaid interest) and the monthly mortgage insurance, as if they were all interest. That is why it reads 7.091 percent here, and why the APR is higher than the note rate on almost every loan: a gap of a quarter to half a point is ordinary. A large gap means large fees or long-lasting mortgage insurance.

Use it carefully. The APR assumes you keep the loan all 30 years, which spreads the upfront costs thin; if you expect to move or refinance sooner, the In 5 Years figure above weights those costs more honestly. And never compare an APR against a note rate: compare rate to rate, APR to APR.

All the interest over 360 scheduled payments, divided by the loan amount. Here the payments total about $705,367, of which $399,367 is interest, and $399,367 is 130.51 percent of the $306,000 borrowed. The number looks alarming on every 30-year loan at today's rates; it mostly measures the term and the rate, not anything hidden. It is useful for feeling the difference a shorter term makes: a 15-year loan at a similar rate has a TIP around a third of this.

The form states that the lender may order an appraisal at your cost and must promptly give you a copy. Keep the copy; if the appraisal comes in below the sale price, your financing and your negotiation both change, and the report is yours to use.

Whether a future buyer of your home could take over this loan at this rate. Conventional loans almost always say will not allow, as here. FHA and VA loans are generally assumable, which can become genuinely valuable if you lock a low rate and later sell when rates are higher; a buyer who can assume your loan will pay for that privilege.

The lender requires the home to be insured, but the words of your choice are the point: the insurer, unlike the appraiser, is yours to pick, and this is a purchase you should shop the same way you shopped the loan. If you ever let the policy lapse, the lender will buy force-placed coverage on your behalf at a much higher price.

The grace period and the fee, stated plainly: here, 15 days and 5 percent of the $1,959.35 principal and interest payment, about $98. These terms are fairly standard, but they do vary, and this line is where you find yours.

A required caution: do not take a loan you can only afford if a future refinance rescues you. Nobody promises rates will fall, and refinancing costs money each time. If this loan only works with a lower rate later, it does not work.

Servicing is who you send payments to and who manages the escrow account, and it is routinely sold: your loan can be transferred to a company you never chose, sometimes within weeks of closing. The transfer cannot change your rate, payment, or terms, and you get 15 days notice with the new address. This line just tells you upfront whether the lender plans to keep you or intends to transfer, as this one does. It is not a red flag either way.

Read the printed sentence again, because it is the most reassuring one on the form: signing only confirms you received the document. It is not an acceptance of the loan, not a commitment to this lender, and not permission to charge you fees. You can sign Loan Estimates from five lenders in the same afternoon and owe none of them anything. The step that moves a loan forward is separate and deliberate: telling the lender you intend to proceed, after you have compared your options.