Comparing offers
Two quotes, one form, no guessing.
The Loan Estimate is standardized by federal rule, which means competing mortgage offers can be read straight across. Most people compare the wrong lines. Here is the method that works, and it works against us too.
Before you compare anything
Normalize three things, or the comparison is meaningless.
This is the step almost everyone skips, and it is how a worse offer wins a comparison it should have lost.
- 01
The same loan amount
Two quotes on different loan amounts are not comparable, and a small difference moves every cost on the page. If one lender rolled fees into the balance and the other did not, you are reading two different loans.
- 02
The same rate-lock period
A shorter lock prices better than a longer one, every time. A quote priced on a short lock can look sharper than a longer-lock quote that is genuinely cheaper. Confirm both are for the same number of days.
- 03
The same day
Mortgage pricing follows the bond market and can move more than once in a single day. A quote from last week is history, not an offer. Ask both lenders to requote on the same day before you decide.
Line by line
Where the real differences live.
- Section A
Origination charges
Compare hardestWhat the lender is charging you to make the loan, including any points you agreed to pay. This is the single most revealing section on the form, because it is the one part of the page fully within the lender's control. If two quotes differ meaningfully, they usually differ here.
- Lender credits
Credits toward your costs
Compare hardestA credit offsets closing costs, and it is not free money. It is paid for with a higher rate. A quote showing a large credit and a quote showing low costs can be the same economics wearing different clothes, so always read the credit and the rate together.
- Sections B and C
Third-party services
Expect similarityAppraisal, credit report, title work, settlement, recording. Section B lists services you cannot shop for and section C lists ones you can. These are set by vendors or by your state rather than by the lender, so they should land in a similar range. A large gap here is worth a direct question.
- Sections F and G
Prepaids and escrows
Do not compare on thisHomeowners insurance, property taxes and per-diem interest. This is not a cost of borrowing. It is your own money moving into your own escrow account and bills, and you would owe it no matter who financed the loan. Read the next section before you let this number decide anything.
- Page 3
APR and total interest percentage
Sanity checkAPR folds certain costs into a single figure so two offers can be compared on more than the rate alone. It is a blunt instrument and it assumes you keep the loan to term, which most people do not. Useful as a sanity check, not as the deciding number.
Where comparisons go wrong
Four ways a quote wins without being better.
- !
The understated escrow
Escrows and prepaids are estimates until a lender has your real tax bill and insurance quote. A lender that estimates them low produces a smaller cash-to-close figure without being one cent cheaper on the actual loan. Compare lender costs against lender costs, and treat escrow lines as placeholders until they are verified.
- !
The credit that is really a rate
Large lender credits look like generosity on page 2 and are paid for by the rate on page 1. There is nothing wrong with taking one, and sometimes it is the right structure, but it is a tradeoff you should choose deliberately rather than be steered into by a low cost column.
- !
The quote that is not a Loan Estimate
A worksheet, a screenshot, a fee sheet or a text message is not a Loan Estimate. Only the standardized form carries the disclosure rules that make comparison meaningful. If you have been given something else, ask for the real form before you compare anything.
- !
The stale quote
Pricing moves daily. Comparing a fresh quote against one from several days ago tells you about the market, not about the lenders. Same day, or it is not a comparison.
Bring us the other one
Send us the competing Loan Estimate and we will read it with you. If we can beat it we will show you how. If we cannot, we will tell you to take it.
Comparison questions, answered.
What is a Loan Estimate?
A Loan Estimate is a standardized three-page federal disclosure that every mortgage lender must provide after you submit an application. Because the form and its section ordering are identical no matter who issues it, two Loan Estimates for the same loan can be laid side by side and read straight across. That standardization is the entire reason it is the right basis for comparing mortgage offers.
How do I compare two mortgage offers fairly?
Normalize three things first: both quotes must be for the same loan amount, the same rate-lock period, and ideally the same day, because mortgage pricing moves with the bond market. Once those match, compare section A origination charges and any lender credits, which is where lenders genuinely differ. Third-party services in sections B and C should be similar since vendors and states set them, and prepaids and escrows are your own money rather than a cost of borrowing.
Why is one lender's cash to close so much lower?
Usually because of escrows rather than the loan. Prepaids and escrow deposits are estimated until a lender has your actual tax bill and insurance quote, so a lender estimating them conservatively will show a smaller cash-to-close figure without offering a better loan. Compare the lender's own charges against the other lender's own charges, and treat escrow lines as placeholders until they are verified.
Are lender credits a good deal?
They can be, but they are not free. A lender credit offsets your closing costs and is paid for through a higher rate, so a quote with a large credit and a quote with low costs may be identical economics presented differently. Whether a credit makes sense depends mostly on how long you expect to keep the loan. The point is to choose it on purpose rather than be drawn to it by a smaller cost column.
Does the APR tell me which mortgage is cheaper?
Partly. APR folds certain financing costs into one figure so offers can be compared on more than the rate alone, which makes it a useful sanity check. Its limitation is that it assumes you hold the loan for its full term, and most borrowers refinance or sell long before that. Use it to catch an offer that looks good on rate and is not, then go back to the itemized sections for the real answer.
Should I let F5 see a competitor's Loan Estimate?
Yes, and we would encourage it. Handing us a competing Loan Estimate lets us tell you plainly whether we can improve on it or whether you should take it. If the other offer is genuinely better, that is what we will tell you. We would rather lose the file than have you sign something worse.
Give us something to beat.
Tell us about the loan and we will shop it across our wholesale lenders and bring back real options in writing, in the same format, so the comparison is honest. No obligation, and no impact to your credit to see them.
This page explains how to read a standardized mortgage disclosure. It is not an advertisement for a specific rate, an offer, or a commitment to lend. All loans are subject to credit approval and underwriting. Loan availability depends on borrower qualifications, property type, occupancy and program guidelines. This is not a commitment to lend. Rates, programs and costs vary by credit, loan amount, loan-to-value, occupancy, property type and program, and change with market conditions.