-
Loan Estimate and Closing Disclosure
What is the loan estimate in the mortgage process? What is the closing disclosure? What is the difference between the loan estimate and closing disclosure? Can the loan estimate and closing disclosure be issued the same day? Does the closing disclosure mean the mortgage loan is approved? Should the closing disclosure closely mirror the loan estimate?
-
1 Reply
-
What is a Loan Estimate?
The Loan Estimate (LE) is a three-page document that provides borrowers with key information about their mortgage, such as the estimated interest rate, monthly payment, and closing costs. It must be given within three business days of completing a loan application.
What is a Closing Disclosure?
The Closing Disclosure (CD) is a five-page form that explains the final details of your mortgage loan, including the exact terms, costs, and fees. It must be provided at least three business days before you close.
Difference Between Loan Estimate and Closing Disclosure
When they are delivered: The LE is issued early on – shortly after you apply for a loan. The CD is sent just before closing.
Why they are given: The LE gives you an idea. But not the promise. The CD confirms what you might get by providing the final numbers.
What they contain: Although both forms share certain data points, like loan amount or annual percentage rate (APR). The second one, Closing Disclosure, covers more specifics in-depth and also happens to have all figures as ‘final.’
Can You Get A Loan Estimate And Closing Disclosure On Same Day?
No, they come on different days. After applying, lenders give applicants this form called ‘Loan Estimate.’ Then, when everything is set for signing, other papers required during closure are issued, including this last one, officially known as “Closing Disclosure,” which should be issued no later than three business days after the close date. However, never before receiving the applicant’s acceptance without revisions made accordingly if any are needed, so plan ahead!
Does Receiving The Closing Disclosure Mean My Mortgage Is Approved?
Receiving does not mean it’s approved yet, but it’s getting closer! Just because lenders send these out doesn’t necessarily mean everything will go smoothly. Some conditions still need to be met before funds are approved. So, wait to celebrate too early or start packing those boxes immediately.