When you apply for a mortgage loan, your lender is required to provide you with a loan estimate within three business days. This document summarizes the loan terms, fees, interest rate, and monthly payments, as well as estimates for property taxes, insurance, and mortgage insurance, if applicable.

However, the loan estimate is only an estimate and may not reflect the final costs. As your loan goes through the underwriting process, the data may change, resulting in differences between the loan estimate and the final closing disclosure.

According to Rocketmortgage.com, you should receive your closing disclosure at least three days before the closing date, which is a final accounting of all your closing costs. It is important to review the closing disclosure carefully and compare it line by line with the loan estimate. If there are any discrepancies, contact your lender to understand the reasons behind the changes.

While some costs are not allowed to change, including loan origination fees and fees paid to third-party service providers, others may fluctuate, such as prepaid interest and mortgage recording fees. It is essential to understand which costs may change and which are fixed to avoid any surprises at closing.

By understanding loan estimates and closing disclosures, you can navigate the mortgage process with greater confidence and clarity.