Have you found a house you want to buy with an FHA mortgage loan? If you don’t know how to request a home loan estimate, there are plenty of resources for you to learn.
A home loan estimate can help you compare lenders and decide which is the right one for you. It may include a breakdown of closing costs, interest rates, and the monthly payment and is generally helpful for borrowers trying to decide how much loan to apply for, how much down payment to make, etc.
It’s never good to simply apply for the loan with the first mortgage lender you find; consumer watchdog agencies like the Consumer Financial Protection Bureau (CFBP) advise borrowers to identify several participating lenders and request loan estimates from all of them.
“Contact the lenders you are considering and tell them you are ready to request a Loan Estimate”, says the official website for CFBP.
The estimate The Loan Estimate provides important information about the loan you want, and at submission time the lender is not responsible for approving or denying the loan.
That said, the lender has to provide the loan estimate within three business days after getting the application. Your application information needs to include:
- Applicant’s name
- Social Security number
- The address of the home you want to buy with the loan
- An estimate of the home’s value or sale prices
- The loan amount you need
When submitting your requests for a loan estimate, make sure you are asking for the same type of loan or a loan with the same features from every lender.
You don’t want to try comparing loans that are not similar as you may not have the same terms and conditions offered to you for a mobile home loan as for an existing construction mortgage or condo loan.
The kind of information that should match when submitting loan estimate requests to more than one lender include:
- The type of loan you seek
- The interest rate type (fixed or adjustable)
- Loan term (15-year or 30-year mortgage)
- Down payment amount
- Total loan amount
- Costs for pre-paid points or other credits
- Rate lock period costs
Other factors to consider sharing with your loan officers include property taxes, condo owner association dues or fees, any expense that may require the use of escrow, etc. You may be able to get information about property taxes and homeowner’s association dues from an experienced real estate agent or from the seller of the property herself.
Some FHA home loan transactions don’t require or use a loan estimate; this is true for those applying for FHA Reverse Mortgage loans and/or HELOC-type mortgages.
If you apply for a reverse mortgage, you may receive a document known as a Good Faith Estimate and a Truth-In-Lending disclosure form. Those buying manufactured homes may not be offered a Good Faith Estimate but may be offered a Truth-In-Lending statement.