A lot of first time homebuyers run into this and panic.

You get your Loan Estimate and something on it is wrong.

Maybe the interest rate is different, or the cash to close total is way more than you expected.

So the question is: Do you have to sign it?

Let me explain why it's still safe to sign an initial Loan Estimate even though the totals didn't match your expectations.

First, signing it doesn't mean you agree.

It just confirms that you were given the document.

Think of it like a receipt.

It’s acknowledging that the lender provided the disclosure.

It is not a final contract and it does not lock you into the loan the way it appears.

Look at the spot where you're signing the loan estimate. Right there below your signature it says "this is an acknowledgment and does not mean you agree to these terms"

Or something like that.

Second, it's a rough draft.

Lenders are working with a moving target.

The initial loan estimate gives you its best guess, but will have incomplete information.

Perhaps it is missing the seller credits.

Does that mean that if you signed a Loan Estimate that didn't have the seller credits, that you suddenly lose out on those seller credits?

No.

It just means they rushed through giving you the Loan Estimate, or didn't know you had seller credits.

It's a rough draft.

You probably don't have a homeowners insurance policy in place yet. On the Loan Estimate, you have a placeholder number there.

That number will change as soon as you secure a homeowners policy.

You probably have the incorrect number of prepaid interest days on the Loan Estimate.

That's because the lender doesn't know the exact date you will close on the home.

If you close earlier in the month than expected, your prepaid interest charges will go up.

If you close later in the month, you'll be charged fewer prepaid interest days.

But here's what you should triple check

Make sure the interest rate is the rate you expected.

And if you asked for a fixed for 30 year mortgage, then they better not have screwed that one up.

After you check the interest rate, check page two.

Then look at sections A and B

How much are they charging you to originate the loan?

Are they charging points? (points are upfront fees to secure a lower rate)

Is their origination fee outrageous?

These fees you see on sections A and B will not likely change.

(they can change if you ask to select a different interest rate, but otherwise, they'll stay the same.)

Ask your loan officer

I hope you trust your loan officer enough to ask him or her why there is such a discrepancy between your expectation, and the results on the Loan Estimate.

But if you feel like your loan officer is dragging you along, whispering sweet-nothings like "sign it, it'll be fine, when have I ever led you astray?" and you're getting weird vibes, then get another Loan Estimate from another loan officer.

I'd hate for you to expect fixes to your final figures, and then for your closing disclosures to never reflect the expected changes.

By then it may be too late to switch lenders.

You may be able to negotiate an extension to figure out your financing. But that's not a guarantee.

I hope this helps!