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Loan Estimates: What You Need to Know
When shopping for a mortgage, you need to compare loan estimates from different lenders. But it’s easy to get confused by the breakdown of costs and who’s paying for them. This is a common scenario I see, especially when clients bring me estimates from other lenders that look cheaper—on the surface.
Breaking Down the Loan Estimate: Who’s Who?
One big misconception is that all costs in a loan estimate come from the lender. Not true. A loan estimate has fees and costs from multiple parties: title companies, local governments and other 3rd parties involved in the transaction.
When I give you a loan estimate I’m not charging you all these costs. I’m just being transparent and listing all the expenses you’ll pay, regardless of who’s paying for them. My goal is to make sure you know exactly what you’re paying for and no surprises at closing.
Cheaper Isn’t Always Better
I get asked sometimes, “Can you match this estimate from [insert competitor, like Quicken]?” My first step is to review the estimate and often find errors. Here’s why that happens:
- Lack of Local Knowledge Competitors may not know how certain costs work in your area. For example:
- In Pennsylvania transfer taxes can vary by location.
- In Pittsburgh transfer taxes are higher in some areas but that’s not always noted.
- Overlooking Tax Bill Timing There are three types of tax bills, each due at different times. If that’s not factored into the loan estimate it can cause confusion—and higher costs—later on.
- New Construction Details Competitors not familiar with new construction loans often miscalculate or omit certain costs. That creates an estimate that won’t match the actual cost at closing.
Why Working with a Local Expert Matters
When I give you a loan estimate I do more than just run numbers. I take the time to:
- Know the Title Agent: I work with them to confirm the fees.
- Pull Tax Bills: I include all applicable taxes upfront.
- Check Every Detail: From transfer taxes to due dates, I leave no stone unturned.
By doing it this way you’ll know when you get to the closing table the costs match the estimate I gave you. No surprises. No last-minute stress.
The Bottom Line: Accuracy Over Assumptions
Loan estimates are only as good as the effort and attention to detail that goes into them. Some competitors may give you what looks like a cheaper option, but those estimates don’t account for the whole picture.
When you work with me you can trust that my estimates are researched and locally based. The result? Peace of mind and confidence that the numbers you see are the numbers you’ll pay at closing.
Got questions about your loan estimate? Let’s talk! I’m here to help you understand the process and make informed decisions.
