How to Use This Checklist
Print or save this checklist and fill it out separately for each Loan Estimate you receive. The Loan Estimate is the standardized form every lender must provide within 3 business days of receiving your application — it contains all the information needed to complete this checklist.
Work through every section in order. Items in the The Math section are computed from earlier inputs — use the calculators linked below to fill them in accurately. Once you've completed the checklist for 3+ offers, the best choice typically becomes obvious at a glance.
The Checklist — 26 Points Across 6 Categories
📋 Basic Loan Terms
💵 Fees & Closing Costs
🔒 Rate Lock
🔎 Loan Terms & Provisions
📈 The Math (fill in with calculators)
🌟 Lender Quality
Red Flags to Watch For
Not every Loan Estimate tells the full story upfront. These are the warning signs that an offer may be lower quality than it appears:
- Missing line items on Loan Estimate. If estimated closing costs look unusually low, check whether appraisal, title, and recording fees are actually listed. Some lenders omit items from early estimates to look cheaper.
- Rate lock shorter than closing timeline. If the lender says closing takes 35 days but offers a 30-day lock, you're one minor delay away from paying an extension fee — or worse, being re-quoted at market rates.
- APR is very close to the interest rate. A tiny spread between rate and APR could mean the lender forgot to include fees in the APR calculation, which is required under Truth in Lending (TILA). Flag this.
- Unusually low appraisal fee. If the lender claims waiver eligibility but you have a higher LTV or less conventional property type, confirm the waiver in writing — otherwise an appraisal may surface as a last-minute add-on cost.
- Prepayment penalty on a conventional loan. This is a red flag for a non-QM product being marketed as conventional. Verify the loan type.
- Pressure to decide before you've gotten other quotes. Rate locks create legitimate deadlines, but no reputable lender needs an answer before you've had time to compare at least 2–3 offers.
How to Score Your Completed Checklists: The Final Decision
Once you've filled out this checklist for 3 or more lenders, you have all the raw data you need. Here's a structured way to identify the winner without letting any single factor dominate the decision unfairly.
Step 1: Eliminate Disqualifiers First
Before comparing any numbers, eliminate any offer that has:
- A prepayment penalty (automatic disqualifier for most borrowers)
- A rate lock shorter than the lender's average close time
- Missing line items on the Loan Estimate (fees not listed = fees that may appear at closing)
- A loan type you didn't request (e.g., ARM when you requested fixed)
These aren't negotiable issues — they're structural problems that make the offer materially different from what you asked for. Remove these from the comparison pool.
Step 2: Primary Sort — Break-Even Point vs. Your Expected Stay
For each remaining offer, compare the break-even point to how long you expect to stay. Create a simple grid:
- Break-even well under your stay (by 12+ months): Valid candidates. Proceed to next step.
- Break-even close to your expected stay: Valid only if you're confident in the timeline. Flag for re-evaluation.
- Break-even beyond your expected stay: Eliminate or negotiate closing costs down before proceeding.
Step 3: Secondary Sort — Net Savings Over Your Hold Period
Among valid candidates, calculate net savings over your actual planned stay (not the full loan life):
Net savings = (monthly savings × months you stay) − total closing costs
The offer with the highest net savings over your planned hold period wins. This is more precise than comparing break-even points alone — a lender with a longer break-even but lower closing costs may generate more net savings if you stay long enough.
Use the Mortgage Savings Calculator to compute this for each offer automatically.
Step 4: Tiebreaker — Lender Quality and Cash Required
If two offers produce nearly identical net savings (within $500 over your hold period), apply these tiebreakers:
- Cash needed to close: If you're short on liquid savings, the offer requiring less cash upfront may be practically necessary even if it's theoretically suboptimal.
- Lender responsiveness: The lender who responds quickly to your inquiries during the quote process will almost certainly close faster and with fewer headaches. This is a real quality-of-life factor worth a few hundred dollars.
- Rate lock protection: In a volatile rate environment, the offer with a longer rate lock at minimal extra cost provides insurance value that the numbers don't capture.
After You Choose: The Closing Disclosure and What to Watch For
Choosing a lender and locking your rate is not the end of the comparison process. Federal law requires lenders to provide a Closing Disclosure at least 3 business days before closing. This document shows the final, actual numbers — and it must be compared against the original Loan Estimate.
What Can Change From Loan Estimate to Closing Disclosure?
Not everything can change — federal TRID rules put strict limits on how much fees can increase:
| Fee Category | Tolerance | What This Means |
|---|---|---|
| Section A — Origination fees | 0% tolerance | Cannot increase at all from Loan Estimate to Closing Disclosure |
| Section B — Lender-selected services | 0% tolerance | Appraisal, credit report — cannot increase |
| Section C — Services you shopped | 0% tolerance on your chosen provider | Title company you selected cannot charge more than estimated |
| Section C — Lender's list (if you didn't shop) | 10% aggregate tolerance | Small increases allowed if within 10% total for this group |
| Section E — Government fees | No tolerance | Can change if actual recorded amounts differ from estimates |
What to Do If Fees Increased
If you receive a Closing Disclosure with fees that exceed the Loan Estimate beyond the applicable tolerance limits, you have the right to demand the lender cure the overcharge — bringing the fee back to the permitted level. This is a federal consumer protection. If the lender refuses, contact the CFPB at consumerfinance.gov/complaint. This situation is uncommon but happens, particularly with newer or smaller lenders.
The 3-Day Right of Rescission
After signing your refinance closing documents, federal law gives you 3 business days to cancel the transaction without penalty — the right of rescission under Regulation Z §1026.23. If you discover at closing that the final terms materially differ from what you were promised, you can walk away without losing your appraisal or application fees. (Note: this right applies to refinances on your primary residence; it does not apply to purchase loans.)
Run the Numbers for Each Offer
Frequently Asked Questions
What is the single most important factor when comparing refinance offers?
The break-even point — closing costs divided by monthly savings — is the most decision-critical number. It tells you exactly how long you need to stay before the refinance pays for itself. Rate and APR matter, but they're inputs to the break-even calculation, not the final answer. Use the Break-Even Calculator with each offer's actual numbers.
What is a rate lock and why does it matter?
A rate lock is a lender's guarantee to hold your quoted rate for a set period (30, 45, or 60 days) while your loan closes. Verify that the lock period is long enough to cover the lender's stated closing timeline — a 30-day lock with a 35-day average close means you're exposed to rate risk or extension fees if anything slows down.
What are prepayment penalties and should I worry about them?
A prepayment penalty is a fee for paying off the loan early (including by refinancing again). Most conventional, FHA, and VA loans cannot have prepayment penalties under post-2014 Dodd-Frank rules. Always confirm on the Loan Estimate Page 3 — if it says "Yes," ask what type of loan you're being offered.
How many lenders should I compare?
At least 3 — ideally 4–5. Freddie Mac research shows getting five quotes versus one saves an average of $3,000 over the loan life. All mortgage inquiries within a 45-day window count as a single hard pull, so shopping aggressively has no credit cost.