Reading a loan estimate doesn’t have to be overwhelming! By following these three simple steps, you can easily spot if you’re getting a good deal and avoid being tricked by deceptive practices that might cost you thousands.
Step 1: Check the Fees in Box A
The most important thing to look at is Box A. This is where lenders can hide fees tied to your interest rate. A low rate can sometimes mean high hidden fees here, so always compare the fees in Box A with the rate you’re being offered. If the fees are high, that low rate might not be the bargain you think it is.
Step 2: Review Box F for Prepaid Items
Some lenders might not list accurate amounts for prepaid items like taxes, insurance, or interest in Box F. These amounts can change depending on when you close, but watch for big differences that could be a red flag.
Step 3: Look for Lender Credits in Box J
Some lenders offer credits in Box J to offset costs based on the rate. A lender credit can help lower your upfront expenses, so keep an eye out for this bonus when comparing loan offers.
Final Tip: Most Other Fees Should Be Similar
Most of the other fees on your loan estimate should be similar across lenders since they’re determined by third parties like title companies. If you see big differences, something might be off.
Need Help?
If this feels like too much, don’t worry! At Stewardship, we’ll review your loan estimate for free to make sure you’re getting a good deal. Call or text us at 602-384-2604, or email your loan estimate to home@stewardship.pro—we’re happy to help!
