How to Read Your Loan Estimate and Closing Disclosure, and Which Costs Can Change

When do I get a Loan Estimate?

Both forms come from the federal TILA-RESPA Integrated Disclosure rules (TRID), part of Regulation Z. A lender must deliver or mail the Loan Estimate no later than the third business day after it receives your application (12 CFR 1026.19(e)(1)(iii)(A)). An application exists once the lender has six things: your name, your income, your Social Security number (to pull credit), the property address, an estimate of its value and the loan amount you want. The lender may ask for more, but the clock starts with those six (1026.2(a)(3)(ii)).

You do not need a signed purchase contract to get one. Before the Loan Estimate, a lender may not require documents that verify what you told it; the rule's own example is that it may ask the sale price but may not require the purchase agreement. Until you have the Loan Estimate and say you intend to proceed, no one may charge you any fee for the loan except a reasonable credit report fee, and the official commentary says requiring a credit card number for other fees breaks that rule (1026.19(e)(2)(i) and (iii); comments 19(e)(2)(i)(A)-5 and 19(e)(2)(iii)-1).

A written estimate of your own rate or costs that a lender, or anyone else, gives you before the official one must carry this sentence at the top of page 1: "Your actual rate, payment, and costs could be higher. Get an official Loan Estimate before choosing a loan." It may not look like the official form (1026.19(e)(2)(ii)).

The closing costs on a Loan Estimate expire if you do not say you intend to proceed within 10 business days, or a longer period the lender sets; page 1 shows the date and time. After that the lender may issue new figures without giving any other reason (1026.19(e)(3)(iv)(E)).

Which "business day" counts?

The rules use two different counts. For the lender's deadline to send the Loan Estimate after your application, and a revised one after it learns of a reason, a business day is a day its offices are open for substantially all of its business. For everything counted back from consummation (the 7-day wait after the Loan Estimate is sent, the 4-day and 3-day receipt deadlines) and for the mail rule below, every day counts except Sundays and federal legal public holidays, so Saturdays count (1026.2(a)(6)). A Loan Estimate or Closing Disclosure sent by mail or email counts as received three business days after it is sent, unless the lender has evidence you received it sooner.

The waits are measured to consummation, the moment you become contractually obligated on the loan. When that happens depends on state law, and it is not necessarily the day escrow closes (CFPB Small Entity Compliance Guide, section 10.2). The CFPB's consumer pages describe the Closing Disclosure as arriving three business days before closing; the rule itself counts to consummation.

How do I read the Loan Estimate?

It is three pages, and its top line reads "Save this Loan Estimate to compare with your Closing Disclosure." What each part is for:

• Page 1, Loan Terms: the loan amount, interest rate and monthly principal and interest, each with "Can this amount increase after closing?", and whether the loan has a prepayment penalty or a balloon payment.
• Page 1, Projected Payments: principal and interest, mortgage insurance and estimated escrow added into an estimated total monthly payment, plus the monthly property taxes, insurance and assessments, shown even if you have no escrow account. The property tax part must reflect the home's taxable value after you buy it, not the seller's bill (1026.37(c)(5)).
• Page 1, Rate Lock: whether your rate is locked and until what date and time, and when the other estimated closing costs expire.
• Page 2, Closing Cost Details: Loan Costs in sections A (origination charges, with points listed first), B (services you cannot shop for) and C (services you can shop for); Other Costs in E (taxes and other government fees), F (prepaids), G (initial escrow payment at closing) and H (other); then Calculating Cash to Close.
• Page 3, Comparisons: In 5 Years (what you will have paid, and how much principal you will have paid off, in the first five years), the APR, which the form says "is not your interest rate", and the Total Interest Percentage.
• Page 3, Other Considerations: including the lender's statement that it will give you a copy of the appraisal. Signing the Loan Estimate only confirms that you received it.

Which closing costs can go up, and by how much?

Regulation Z sorts every estimated charge into one of three groups (12 CFR 1026.19(e)(3)):

• Cannot go up at all without a permitted reason (zero tolerance): fees paid to the lender, a mortgage broker or an affiliate of either; fees for third-party services you were not allowed to shop for; and transfer taxes. A lender credit that shrinks counts as an increase. The rule's example: $750 of lender credits estimated, only $500 given.
• Can go up 10% in total: recording fees, plus services you were allowed to shop for when you chose a provider from the lender's written list, or chose no one, and the provider is not the lender or its affiliate.
• No set limit, if the estimate was made in good faith: prepaid interest; homeowner's insurance premiums; amounts placed in your escrow account; services you shopped for with a provider not on the lender's list; and property taxes and other third-party services the lender does not require.

How does the 10% group work?

The test applies to the group's total, not to each fee. In the rule's example, if the 10% group adds up to $1,000 on the Loan Estimate, a $300 settlement agent fee may rise past $330 as long as the group stays at or below $1,100. A fee left off the Loan Estimate but charged at closing, such as a $10 notary fee, is added to the group; a fee for a service that never happened is taken out. The math uses exact amounts, even though the Loan Estimate rounds to whole dollars.

"No set limit" still has limits. An estimate that is unreasonably low, or missing when the lender should have known of the charge, is not in good faith. The rule's examples include estimating prepaid interest from the 30th when the lender knows the loan will close on the 15th, leaving out homeowner's insurance the lender requires, and a missing or unreasonably low property tax figure. In the property tax example, the charge is then held to the zero-tolerance rule (comments 19(e)(3)(iii)-1 and -3).

When can the lender change the Loan Estimate?

Your final charges are measured against the original Loan Estimate unless one of six permitted reasons applies (1026.19(e)(3)(iv)):

• A changed circumstance that affects settlement charges. The rule defines one as an extraordinary event beyond anyone's control or an unexpected event specific to you or the transaction; information the lender relied on that was wrong or changed; or new information it did not rely on.
• A changed circumstance that affects your eligibility, such as your creditworthiness or the property's value.
• Changes you ask for.
• Locking a rate that was not locked when the Loan Estimate was issued.
• Not saying you intend to proceed within 10 business days.
• A delayed settlement on a new-construction loan, if the original Loan Estimate warned of it.

What counts as a changed circumstance, and what are the limits?

The official commentary's examples include a war or natural disaster, the title insurer going out of business, income stated as $90,000 that underwriting finds is $80,000, a neighbor's claim against the property's boundary, an appraiser finding the home sits on a farm where a different fee schedule applies, and a termite report that requires a further inspection. A lender that issued the Loan Estimate before it had the property address cannot later call receiving the address a changed circumstance.

Three limits apply. The lender must send the revised Loan Estimate within three business days after it learns enough to know a reason applies. It may raise only the charges that the event actually increased, and must keep a record of why. For the 10% group, the reset counts only if the event pushes the group's total up by more than 10%; in the rule's example, an unreleased lien added title work but raised the group by only 5%, so the final title fees were measured against the original estimate (comments 19(e)(3)(iv)-2 and 19(e)(3)(iv)(A)-1).

Revisions also run out of time. No revised Loan Estimate may be given on or after the day the Closing Disclosure is given, and you must receive one at least four business days before consummation. After the Closing Disclosure, a lender resets figures with a corrected Closing Disclosure instead, which the rules have allowed since June 1, 2018 (1026.19(e)(4)). A lower figure on a revised form does not bind the lender: good faith can still be measured against the original, higher estimate.

What does locking my rate change on these forms?

A rate is locked when the lender has agreed to lend at that rate, on the conditions in the lock agreement. Page 1 of the Loan Estimate says whether you are locked and, if so, the date and time the lock ends, and it warns: "Before closing, your interest rate, points, and lender credits can change unless you lock the interest rate."

The CFPB says locks are "typically available for 30, 45, or 60 days, and sometimes longer." It also says a locked rate can still change if your application changes, such as the loan amount, your credit score or your verified income, or if closing slips past the lock period, and that the Loan Estimate does not show what an extension would cost. That cost is a question to ask the lender before you lock.

• Locked when the Loan Estimate was issued: your final points and lender credits are measured against that Loan Estimate, and they cannot get worse without a permitted reason.
• Locked later: the lender must send a revised Loan Estimate within three business days of the lock, showing the locked rate, points, lender credits and other rate-dependent charges. Those are then measured against the revision.
• Locked on or after the day the Closing Disclosure is issued: the lender issues a corrected Closing Disclosure. A new three-day wait applies only if the lock causes one of the three changes described below.
• An extension you ask for is treated as a change you requested. The lender may add its extension fee, but no more than it usually charges for one.

How do I compare two Loan Estimates?

Every lender uses the same form so that you can compare offers line by line. Page 3 says "Use these measures to compare this loan with other loans" and gives three: In 5 Years, the APR and the Total Interest Percentage (TIP). Points to keep in mind:

• Unlocked rates, points and lender credits can change, as page 1 says, so estimates issued on different days may not be comparable. Check each one's issue date and expiration.
• The APR expresses the cost of the loan as a rate and includes upfront fees. The TIP is the interest over the life of the loan as a percentage of the loan amount; it counts prepaid interest but not other upfront fees. The CFPB's illustration: a $100,000 loan at 4% "could have an APR of 4.25 percent and a TIP of 72 percent."
• Section A is the lender's own charges, which cannot go up without a permitted reason. Sections B and C depend partly on providers you choose.
• Lender credits are subtracted from your total closing costs, so a smaller credit on a later form means you pay more.

When does the Closing Disclosure arrive, and what restarts the wait?

You must receive the Closing Disclosure at least three business days before consummation, counting Saturdays but not Sundays or federal holidays (1026.19(f)(1)(ii)). In the rule's example for a Thursday consummation, delivery by hand on Monday works; by mail, it must be sent by the Thursday before. Escrow may prepare and deliver the form for the lender, but the lender stays responsible. Neither the lender nor the loan servicer may charge you for preparing or delivering it (1026.19(f)(5)).

Only three changes after you receive it start a new three-business-day wait (1026.19(f)(2)(ii)):

• The APR becomes inaccurate. For a regular loan, that means off by more than 1/8 of a percentage point, subject to some mortgage-specific allowances. In the rule's example, a Closing Disclosure showing 7.00% needs no new wait at 7.10% (a corrected form is still due), but at 7.15% consummation must wait three more business days.
• The loan product changes, for example from a fixed rate to an adjustable rate.
• A prepayment penalty is added. Removing one does not restart the wait.

What about every other change before closing?

Everything else needs only a corrected Closing Disclosure that you receive at or before consummation. The rule's example: at the final walk-through the buyer finds a damaged dishwasher, and the seller agrees to a $500 credit. Whether a lower APR restarts the wait is not a flat rule; the CFPB says an overstated APR can be inaccurate, depending on the finance-charge rules.

You may ask to inspect the Closing Disclosure, as complete as it can be, during the business day before consummation. The three-day wait can be waived only for a genuine personal financial emergency, such as a foreclosure sale of your home that will go ahead without the loan, and only with one dated written statement, in the borrowers' own words, that describes the emergency and waives the wait, signed by every borrower who is primarily liable; printed waiver forms are not allowed (1026.19(f)(1)(iv)).

How do I compare the Closing Disclosure with my Loan Estimate?

The Closing Disclosure is five pages. Its top line reads "This form is a statement of final loan terms and closing costs. Compare this document with your Loan Estimate." It must use the same labels and order as the Loan Estimate.

In the CFPB's sample forms for a fictional $162,000 loan, total closing costs went from $8,054 on the Loan Estimate to $9,712.10 on the Closing Disclosure, while cash to close fell from $16,054 to $14,147.26, helped by a $2,500 seller credit. These are the CFPB's illustrative figures, not market data. They show why you read both lines: higher closing costs can still mean less cash to bring, and the reverse.

• Page 3, Calculating Cash to Close: a Loan Estimate column taken from your most recent Loan Estimate, a Final column, and "Did this change?" answered YES or NO. Start here.
• Page 2, Closing Cost Details: the same A to J sections, now showing who pays each item (you, the seller or others) and who receives it. If you picked a provider from the lender's list, that service now appears under "Services Borrower Did Not Shop For"; only providers you found yourself appear under "Did Shop For".
• Page 3, Summaries of Transactions: your side (sections K and L) and the seller's (M and N), including prorated city and county taxes and any item paid outside closing, marked P.O.C.
• Page 4, Escrow Account: what your escrow account pays in the first year, what it does not, the initial deposit and the monthly escrow payment.
• Page 5, Loan Calculations: total of payments, finance charge, amount financed, APR and TIP, plus contact details for the lender, both real estate brokers and the settlement agent.

Where do California costs appear on these forms?

The federal forms do not decide who pays a California transfer tax. Who pays is set by state or local law and your purchase contract; the forms only show it. On the Loan Estimate, Section E shows only the transfer taxes you pay. A seller-paid transfer tax appears only on the Closing Disclosure, on its own line naming the government that charges it. Any government fee based on the price or the loan amount counts as a transfer tax on these forms, whatever local law calls it. Most city guides on this site list that city's transfer tax from its own code.

Title insurance can look different from the title company's own quote. The forms show the lender's policy at its full premium and put the discount for buying both policies together into the owner's policy figure, which is marked "(optional)" when you pay for it and the lender does not require it. The CFPB notes that title companies' own figures often show the discounted rate for the lender's policy and the full rate for the owner's, and says that the title costs your title company gives you, added up, should match the totals on the forms.

In Northern California, escrow is usually handled by a title company, the Department of Real Estate says. On these forms any fee for conducting the closing begins with "Title –", as in the CFPB sample's "Title – Settlement Agent Fee".

What about prepaids, the escrow account and supplemental taxes?

Section F, Prepaids, can include property taxes due within 60 days after consummation. Section G is the opening deposit into your escrow (impound) account. Federal rules let the lender or servicer collect enough to pay those bills through your first payment date, plus a cushion of no more than one-sixth of a year's escrow payments (12 CFR 1024.17(c)(1)). Levies by independent districts, such as bond or water districts, count as property taxes on these forms.

One California bill sits outside both forms. After a purchase the county reassesses the home and, if the new value is higher than the old one, sends one supplemental tax bill, or two if the purchase happens from January through May (if it is lower, a refund instead). The Board of Equalization says lenders do not receive these bills, even when they pay your regular bill from an impound account; they go to you. The mortgage escrow guide linked below explains them.

What if I was charged more than the rules allow?

The lender must refund the excess within 60 days after consummation and send a corrected Closing Disclosure (1026.19(f)(2)(v)). The rule's example: zero-tolerance items came in over by $30, $25, $25 and $15, or $95 in all. The 10% group was $1,000 on the Loan Estimate and $1,190 at closing, when $1,100 was the most allowed, so $90 more. The refund owed is $185.

On the corrected form, the cure appears in Calculating Cash to Close as a statement that the increase exceeds legal limits by a dollar amount, with a matching credit on the Lender Credits line. Other corrections have their own deadlines. If, within 30 days after consummation, something about the settlement changes what you paid, such as a recording fee or transfer tax that turns out different once the documents are recorded, the lender must send a corrected form within 30 days of learning of it. Clerical errors that are not numbers must be fixed within 60 days after consummation. If the city or county raises property tax rates after closing, that is not a settlement change and needs no corrected form.

Are these rules about to change?

Not yet. Executive Order 14393, signed March 13, 2026, told the CFPB to consider, among other things, "replacing TRID timing rules with a materiality-based standard." The CFPB published a request for information on July 9, 2026, with comments due August 10, 2026. A request for information changes nothing by itself.

A Federal Register search on November 7, 2026 found no proposed or final rule changing Loan Estimate or Closing Disclosure timing or tolerances. The only recent change to the forms adds content for PACE clean-energy financing, effective March 1, 2026, and does not change the forms for an ordinary purchase loan. I will update this post if a proposal is published.

What should I check when each form arrives?

A checklist, in the order the forms arrive:

• Loan Estimate: the date issued, whether the rate is locked, and when the lock and the estimate expire.
• Loan Estimate: Section A and the lender credits, which cannot get worse without a permitted reason.
• Loan Estimate: the written list of providers you may shop for, and which one you choose.
• Any revised Loan Estimate: the reason the lender gives, and which charges changed.
• Closing Disclosure: the date you received it, counted against the three-business-day wait.
• Closing Disclosure: every "Did this change?" row marked YES on page 3, and the reason.
• Closing Disclosure: your deposit credit, seller credits and prorated taxes, checked against your contract and escrow's figures.
• After closing: any refund for an excess charge, due within 60 days.

The short version

The Loan Estimate arrives within three business days of a six-item application and shows what the loan should cost; the Closing Disclosure must reach you at least three business days before consummation and shows what it does cost. Lender fees, services you could not shop for and transfer taxes cannot go up without a permitted reason; recording fees and services from the lender's list can rise 10% as a group; the rest must be estimated in good faith. Only an inaccurate APR, a new loan product or an added prepayment penalty restarts the three-day wait, and charges over the limits must be refunded within 60 days.

Every rule and figure above was checked against Regulation Z, its official commentary and the CFPB's own forms and guides on November 7, 2026. This is general education, not legal or lending advice; your lender's documents and your contract control your transaction.

Real estate agent | DRE 02236890 | Real Brokerage Technologies.