A Loan Estimate is the standardized three-page form a mortgage company must give you within three business days of a complete application. It shows your rate, monthly payment, and closing costs in the same layout every time, so you can compare offers line by line. If you are buying in Short Pump, Innsbrook, or Glen Allen and have just received one, this loan estimate form explained page by page will show you what each box means and what to question. You will also get a worked dollar example comparing two quotes, a Loan Estimate vs. Closing Disclosure table, and an 8-question FAQ.
Written by Duane Buziak, NMLS #1110647 | Coast2Coast Mortgage LLC NMLS #376205
When the Loan Estimate Arrives and What Triggers It
The clock starts at application, and the law defines application narrowly. Per the Consumer Financial Protection Bureau, a mortgage company or broker has three business days to deliver the form once it has received six items: your name, income, Social Security number, the property address, an estimate of the property’s value, and the loan amount you want. Once those six items are in, the form is due, even if you have not chosen a loan program.
That is why a Loan Estimate is not the same thing as pre-qualification. Duane Buziak’s credit-safe pre-qualification comes first and has no credit impact, so you can learn what price range fits before you commit to a house. The Loan Estimate follows when you apply on a specific home, such as a townhome near Deep Run Park or a single-family house in Wyndham.
Treat the form as a quote, not a commitment. It does not mean you are approved, and the interest rate is not locked unless the form says it is. If the rate is floating, it can move with the market until you lock.
The estimate generally remains available for acceptance for at least ten business days unless it states a different date, as of the CFPB’s current guidance. Nothing moves forward until you tell the company you intend to proceed, which you can do by signing the form or otherwise indicating it. Until then, you are free to collect other quotes, and you should.
Page 1 Walkthrough: Loan Terms, Monthly Payment, and Cash to Close
Start with the loan terms box and read it top to bottom: loan amount, interest rate, then monthly principal and interest. Below those sit three yes/no flags that deserve your full attention. Can the rate rise after closing? Is there a prepayment penalty? Is there a balloon payment? On a standard fixed-rate loan, all three should read “No.”
Next comes Projected Payments, which shows principal and interest, mortgage insurance if it applies, and estimated escrow. Escrow is the account that collects property taxes and homeowners insurance with your monthly payment. In Henrico, those two items drive the number. Real estate tax rates are set by the county and can change, so check the current rate on the Henrico County Finance Department pages rather than assuming last year’s figure. Insurance quotes for homes along the River Road corridor can differ from those in newer Short Pump neighborhoods, so use a real quote in your estimate.
The bottom of page 1 holds two numbers that people often confuse:
- Estimated Closing Costs are the fees to close the loan, detailed on page 2.
- Estimated Cash to Close is what you actually bring. It combines your down payment, closing costs, and deposits, then subtracts credits such as seller contributions or your earnest money already paid.
The most common misconception is that the rate printed on page 1 is a rate lock. It is not. Look for the expiration date for the quoted terms near the top of the form, because it tells you how long the rate and costs are good if you do lock.
Page 2 Walkthrough: Sections A Through J of Closing Costs
Page 2 itemizes every closing cost in lettered sections. Read them in order:
- Section A, Origination Charges: what you pay for the loan itself, including discount points and any fees paid to the mortgage broker.
- Section B, Services You Cannot Shop For: third-party charges such as the appraisal and credit report.
- Section C, Services You Can Shop For: title insurance, settlement services, and survey.
- Section D: the total of A, B, and C, called total loan costs.
- Section E, Taxes and Other Government Fees: recording fees and any transfer taxes.
- Section F, Prepaids: items paid in advance, such as the first year’s homeowner’s insurance premium and prepaid interest.
- Section G, Initial Escrow Payment at Closing: the starting cushion for your escrow account.
- Section H, Other: items that fit nowhere else.
- Sections I and J: total other costs (E through H) and total closing costs.
What Is Allowed to Change
Federal rules sort fees into three tolerance groups. Verify the details against the CFPB’s Closing Disclosure guidance, which explains how the final numbers are checked against the estimate.
- Cannot increase at all: charges in Section A, the fees for services in Section B, and transfer taxes.
- Can rise a combined 10%: recording fees, plus shoppable services (Section C) that you chose from the company’s provider list.
- Can change: prepaids, initial escrow, and shoppable services you pick from outside the provider list.
There are exceptions, such as a valid change in circumstances, which allows the company to issue a revised estimate. “Cannot increase” is not a promise that the number can never move, only that it needs a documented reason.
Here is the Henrico angle. Closings in Glen Allen and Tuckahoe commonly run through local title companies. Because title services sit in Section C, you can shop them, get your own quotes, and keep the estimate stable if you choose from the provider list.
Page 3 Walkthrough: APR, TIP, and the Comparison Box
Page 3 opens with the Comparisons box, which holds three figures:
- In 5 Years: the total you will have paid in principal, interest, mortgage insurance, and loan costs after 60 payments, plus the amount of principal you will have paid down by then.
- APR: the annual percentage rate, which folds in some closing costs and expresses them as a yearly rate.
- TIP: the total interest percentage, meaning the interest you would pay over the full term as a share of the loan amount.
APR assumes you keep the loan for the entire term. If you expect to sell or refinance in five or seven years, an APR that spreads upfront costs across 30 years can make a loan with points look cheaper or costlier than it is for you. The “In 5 Years” line is often more useful for that reason.
Below that, page 3 covers appraisal, assumption, homeowner’s insurance, late payment, servicing, and other statements. Read them, and ask the mortgage company about anything unclear.
A Worked Comparison
This is a hypothetical illustration, not a current rate quote. Suppose you buy a $500,000 home in Short Pump with 20% down ($100,000), so the loan is $400,000 on a 30-year fixed term.
- Quote A: 6.25% with no points. Principal and interest is about $2,463 a month.
- Quote B: 6.00% with one point ($4,000). Principal and interest is about $2,398 a month.
The monthly savings are about $65. Divide the $4,000 point cost by $65 and the points break even in about 62 months. At the 60-month mark that Page 3 uses, Quote B has saved roughly $3,880, so you are still slightly behind. Compare the “In 5 Years” line on each form against your own timeline: if you plan to stay past about five years, the points start to pay off, and if not, Quote A wins.
Cash to close works the same way. Using $12,000 in closing costs: $100,000 down plus $12,000, minus a $5,000 earnest deposit, equals $107,000 due at closing.
Loan Estimate vs. Closing Disclosure: What Should and Should Not Change
The Closing Disclosure is the final version of these numbers. Per the CFPB, it must reach you at least three business days before closing, which gives you time to compare it against your estimate.
| Feature | Loan Estimate | Closing Disclosure | Why It Matters |
|---|---|---|---|
| When you receive it | Within three business days of a complete application | At least three business days before closing | Each gives you a window to compare and ask questions before committing. |
| Purpose | Estimate of rate, payment, and costs for shopping | Final terms and costs of the loan | One helps you choose, the other confirms what you are signing. |
| Page count and layout | Three pages, lettered cost sections A through J | Five pages, same lettered structure | The matching layout lets you check line against line. |
| What you do with it | Compare quotes and signal intent to proceed | Review against the estimate and raise discrepancies | Unexplained changes are easiest to fix before closing day. |
Before closing, lay the two forms side by side. Question any change in Sections A and B first, since those are the charges that generally cannot increase. If help with closing costs is part of your deal, ask Duane Buziak about no-out-of-pocket closing options and how any credit appears in the cash-to-close figure.
How you collect your quotes matters too, because the form only compares what you bring to it.
| Feature | Duane Buziak | A typical single-shelf lender | Why It Matters |
|---|---|---|---|
| Program access | A mortgage broker with access to hundreds of wholesale lenders | One company’s own program menu | More programs means more chances to match your down payment and credit. |
| Credit check at pre-qualification | NoTouch soft pull, no credit impact | Often a hard pull | A hard pull can lower your score while you are still shopping. |
| Pricing check | Dare to Compare challenge: bring a competing quote | Usually one price, no outside check | You can test an offer without starting over. |
| Local presence | Glen Allen office on Cox Rd | Often remote or out of area | A nearby office makes it easy to review your forms in person. |
Loan Estimate FAQ: Eight Questions Henrico Buyers Ask
Who is a mortgage broker in Henrico, VA?
Duane Buziak is a Glen Allen-based mortgage broker who helps Henrico buyers compare loan programs. He has been helping families find their new homes since 2014, and his office is on Cox Rd, near Innsbrook and Short Pump.
Does requesting a Loan Estimate hurt my credit?
Pre-qualification with Duane Buziak does not affect your credit, because it uses a soft pull. A formal application can involve a credit check, and the timing varies, so ask before you submit. Multiple mortgage inquiries within a short window are typically treated as one for scoring, but confirm the details for your situation.
Can I get Loan Estimates from more than one company?
Yes, and you should. The standardized form makes quotes directly comparable, so collect at least two for the same loan amount and program. Line up the “In 5 Years” figures and the Section A totals.
Is a Loan Estimate a loan approval or rate lock?
No. It is a quote, not an approval, and the rate is not locked unless the form states a lock. Underwriting still has to review your income, assets, credit, and the property.
What if the numbers change before closing?
Some charges cannot increase, while others can rise by a combined 10% or change freely, depending on the category. A valid change in circumstances, such as a changed loan amount, allows a revised estimate. Compare your Closing Disclosure against the original and ask about any difference.
What is the difference between interest rate and APR?
The interest rate sets your monthly interest charge, while APR adds certain closing costs and expresses the total as a yearly rate. APR is useful for comparing loans of the same type. If you will refinance or sell early, also look at the “In 5 Years” figure.
Can I shop for title and settlement services?
Yes, for the services listed in Section C. Choosing a provider from the company’s list keeps those fees within the 10% group, while a provider outside the list can change the estimate more freely. Henrico buyers often use local title companies.
How long is a Loan Estimate good for?
At least ten business days after delivery unless the form states otherwise, as of the CFPB’s current guidance. The rate quoted is only held if you lock, and the form shows an expiration date for the quoted terms.
Line Up Two Quotes and Ask About Every Number You Cannot Explain
The Loan Estimate does its job only when you use it to compare. Put two or more quotes side by side, check the cash to close, and ask about any figure you cannot explain.
Your dream home in Henrico County is closer than you think. Discover exactly what you can afford with our credit-safe pre-qualification process that protects your score while unlocking your options. Get pre-qualified today and take the first step toward homeownership with a local mortgage expert who understands your community.