The Loan Estimate is one of two foundational TRID disclosures (the other is the Closing Disclosure). It must be delivered within 3 business days of receiving a complete loan application, and standardizes how loan terms and costs are disclosed across all lenders.
What’s on the Loan Estimate
Page 1 — Loan terms: loan amount, rate, monthly P&I, prepayment penalty status, balloon payment status, projected payments table, costs at closing summary.
Page 2 — Closing cost details: itemized origination charges, services borrower can shop for, services borrower can’t shop for, taxes and government fees, prepaids, initial escrow, other costs.
Page 3 — Comparison and other considerations: total APR, total interest percentage, comparisons to help borrower shop, contact information, confirm receipt signature.
What ‘application’ means under TRID
TRID defines a ‘completed application’ as having six specific pieces of information: borrower name, monthly income, SSN to obtain credit report, property address, estimated property value, and loan amount sought. Once all six are received, the LE clock starts. Lenders cannot delay LE delivery by waiting for additional documentation.
LE vs GFE
The Loan Estimate replaced the Good Faith Estimate (GFE) and the initial TILA disclosure as of October 3, 2015. Many seasoned LOs still call it ‘the GFE’ colloquially even though the form has been the LE for over 10 years.
