Loan Estimate vs Closing Disclosure: Which Fees Change

An appraisal fee climbs $145 between the Loan Estimate and the Closing Disclosure, and it may be flatly not allowed to move. An escrow deposit on the same page climbs $900, and that one is perfectly lawful; arguing about it earns you a patient explanation and nothing else.

Size tells you nothing. What decides whether you have a claim is which of three groups the line belongs to, and the groups are drawn by a federal regulation rather than by your lender's goodwill or your agent's sense of what is normal.

Section numbers run through everything below, so you can open the same paragraph I opened. The regulation quoted here is the 1 June 2026 edition of the CFR rather than the live page, and §1026.19's own version history records no amendment after 1 June 2018, which I checked on 16 August 2026. Every citation links to the current text, so the effective date on whatever opens is the one that governs.

Where the comparison already exists on paper

The Loan Estimate has to reach you no later than the third business day after the creditor receives your application, and no later than the seventh business day before consummation (12 CFR 1026.19(e)(1)(iii)). The Closing Disclosure has to be in your hands no later than three business days before you sign (1026.19(f)(1)(ii)(A)). Weeks pass between those two dates, figures move, and nobody sends you a diff.

Except that the form does, in one table. Page 3 of the Closing Disclosure carries Calculating Cash to Close, introduced by the sentence the rule puts there for you: use this table to see what has changed from your Loan Estimate. Under 1026.38(i) the table runs three columns — the figure from the Loan Estimate, the Final figure, and a column headed Did this change?

That third column is doing more than most readers ask of it. Where total closing costs went up by more than the tolerances allow, 1026.38(i)(1)(iii)(A)(3) requires the column to say that the increase exceeds the legal limits, and to say it by the dollar amount of the excess. The form is built to confess. It just does so in small type, on a page people skim on their way to the signature block.

The fee detail sits on page 2, in two tables. Loan Costs holds origination charges, services you did not shop for, and services you did shop for. Other Costs holds taxes and other government fees, prepaids, the initial escrow payment, and a block called simply Other.

The capital letters everyone quotes at each other — Section A, Section B, Section E — are not in the regulation's own sentences. They come from model form H-25 in Appendix H. What makes them dependable is 1026.38(t)(2): where a heading or label carries a capital letter designation in H-25, the creditor's form has to carry that designation too. The letters on your disclosure are therefore the same letters as on anyone else's, which is what makes the shorthand safe to put in a letter. Note that the run from A onward includes the subtotal lines as well as the fee blocks, so the letters are not a straight count of itemized sections.

Two more requirements make the side-by-side comparison work at all. 1026.38(t)(1)(ii) says the disclosures must appear in the same order and position as on form H-25, and 1026.38(h)(4) says each item has to be labeled consistently with the Loan Estimate and listed in the same sequential order as on it. Your two page 2s are meant to line up row for row. When one does not, that is itself worth a question.

One scope note before the three groups. The Loan Estimate obligation in 1026.19(e)(1)(i) runs to a closed-end consumer credit transaction secured by real property or a cooperative unit, other than a reverse mortgage subject to §1026.33, and 1026.19(f)(1)(i) attaches the Closing Disclosure to that same set of transactions. So a home equity line of credit is outside, being open-end credit rather than closed-end. A reverse mortgage is excluded by name. A loan whose security is neither real property nor a co-op unit never comes in at all. Timeshares are inside but on their own clock: 1026.19(e)(1)(iii)(C) lifts the seven-business-day rule for them, and 1026.19(f)(1)(ii)(B) lets the Closing Disclosure arrive as late as consummation. The quick test is simpler than any of that. If your file holds a Loan Estimate and a Closing Disclosure, the tolerances below are yours.

The lines that were not allowed to move at all

1026.19(e)(3)(i) sets the default, and it is unqualified: an estimated closing cost is in good faith if the charge you actually pay does not exceed the amount originally disclosed. Not "does not exceed it by much." Does not exceed it. Everything that follows in the regulation is an exception carved out of that sentence.

Two kinds of charge sit squarely in the zero group.

• Anything paid to the lender, the mortgage broker, or an affiliate of either for a required service. Origination, underwriting, processing, application, rate-lock fees. Section A, mostly.
• Fees for a required service you were not permitted to shop for. Appraisal, credit report, flood certification, the lender's own tax service. Section B, whose printed heading — Services Borrower Did Not Shop For — does the identifying work for you.

Transfer taxes belong in the same group, by a slightly different route. They are not named in (e)(3)(i). They land there by elimination: a transfer tax is not a charge for a third-party service and not a recording fee, so the 10 percent exception cannot reach it, and it does not appear on the short list at (e)(3)(iii) either. Nothing is left but the general rule. The CFPB's consumer guidance puts transfer taxes in the cannot-increase column, and that is the reasoning underneath it. Section E.

So the $145 on the appraisal line is not a rounding matter. Absent one of the revision reasons further down, it is a $145 refund.

Section B is checkable rather than arguable, thanks to one requirement in the form rule. 1026.38(f)(2) makes every line in that block carry the name of the person ultimately receiving the payment, so the disclosure itself names the appraisal management company, the flood vendor, the credit reseller. Read the names before you read the amounts. A charge that turns out to be going to the lender or an affiliate of the lender sits in the zero group by the first route above rather than the second, whichever heading it was printed under.

10 percent is measured on a total, not on a line

This is where most disputes are actually won or lost, and where most people do the arithmetic wrong.

Under 1026.19(e)(3)(ii) an estimate for a third-party service or a recording fee is still in good faith if the aggregate of those charges does not exceed the aggregate disclosed by more than 10 percent. For a third-party service, two further conditions attach: the charge must not be paid to the lender or an affiliate of the lender, and the lender must have permitted you to shop for that service. Recording fees are named in the same sentence and land in the same aggregate, but those two extra conditions are written about services, not about them.

Aggregate. Added up. One line can double while the group stays compliant, because another came in under. Four lines can each drift up 6 percent and the group is blown.

There is a trap folded into the second condition, and it runs in your favor. Pick a provider from the lender's written list, then discover the provider is an affiliate of the lender, and (e)(3)(ii) is not satisfied at all. That charge falls back to zero tolerance.

Worked as an illustration only. These are not typical figures anywhere, and recording fees in particular are set county by county.

The ceiling is $1,120 plus 10 percent, so $1,232. Actual is $1,255. The overage is $23, and $23 is the number the lender owes — not the $65 recording jump that caught your eye. Run the sum before you write to anyone. Skipping it is the commonest way a complaint arrives already answered.

The written list matters here more than anywhere else. When a lender permits you to shop for a settlement service, 1026.19(e)(1)(vi)(C) requires it to give you a written list of available providers, naming at least one for each shoppable service, delivered separately from the Loan Estimate but on the Loan Estimate's timetable. Find that list in your file. It is the document that decides which lines belong in this group at all.

A short list that may move as far as it likes

1026.19(e)(3)(iii) lets five categories of charge vary without limit, provided the original estimate was consistent with the best information reasonably available to the creditor when it was made. The paragraph adds that this holds even where the charge is paid to the creditor or an affiliate, so long as the charge is bona fide.

Prepaid interest. Property insurance premiums. Amounts placed into an escrow, impound, reserve or similar account. Property taxes and other charges for third-party services the creditor did not require. And the one that surprises people: charges paid to a third-party provider you selected who was not on the lender's written list.

Read that last one twice. Shop for title or closing services and pick a company off the list, and the line stays in the 10 percent group. Find your own instead, and the identical line moves here, where nothing caps it. That is not a penalty. It is the logic of the rule — you took the choice, so you took the price risk that came with it. Make the trade knowingly rather than discovering it on page 3.

Everything in the prepaids and escrow blocks is going to move, and almost always upward, because prepaid interest depends on the day you actually close and escrow deposits depend on when the county's next tax installment falls. Those are not the lines to spend your three days on.

How a lender resets the baseline

None of the above is absolute. 1026.19(e)(3)(iv) permits a revised estimate, and a valid revision replaces the figure the tolerance is measured against. The reasons are a closed list of six: a changed circumstance affecting settlement charges; a changed circumstance affecting your eligibility; revisions you requested; points or lender credits moving because the rate was not locked when the original estimate went out; expiration, where you indicated intent to proceed more than ten business days after delivery, or after whatever longer period the lender printed on the estimate; and a delayed settlement date on a construction loan.

Closed list, tight timing. Under 1026.19(e)(4)(i) the revised disclosure has to go out within three business days of the lender receiving information sufficient to establish that one of those six applies. Then (e)(4)(ii) adds two limits that people miss. You must receive the revised Loan Estimate no later than four business days before consummation, and if it was not handed to you in person you count as receiving it three business days after it went in the mail, which quietly pulls the real deadline earlier. And the lender may not issue a revised Loan Estimate on or after the day it provides the Closing Disclosure. A new baseline cannot be manufactured at the closing table.

Which gives you a precise question rather than a vague grievance:

Which reason under 1026.19(e)(3)(iv) applies to this increase, on what date did you receive the information that established it, and may I have the revised Loan Estimate that was issued for it?

If a revised Loan Estimate exists, it has a date on it, and the date either works or it does not. If none exists, the fee is being measured against the original estimate, which is exactly the answer you wanted.

Whether or not anybody volunteers it, the paperwork behind that question has to exist. Under 1026.25(c)(1)(i) a creditor retains evidence of compliance with 1026.19(e) and (f) for three years after consummation, and under (c)(1)(ii)(A) it keeps each Closing Disclosure, and the documents related to it, for five. The other half of the answer is a date you already hold: (e)(4)(ii) required you to receive any revised Loan Estimate no later than four business days before consummation, so a revision first mentioned at the table has a timing problem of its own, quite apart from whether its reason was one of the six.

Sixty days that start when you sign, not when you notice

A tolerance breach does not expire at the closing table. That is the most useful sentence on this page, and it is the one people find out too late.

1026.19(f)(2)(v) says that where the amounts you paid exceed what (e)(3)(i) or (e)(3)(ii) allowed, the creditor refunds the excess and delivers a corrected Closing Disclosure reflecting that refund, both no later than 60 days after consummation.

Sixty days after signing, not before it. In practice a lender that catches the problem at the table cures it there as a lender credit, and 1026.38(h)(3) then requires the Lender Credits line to state that the amount includes a credit for an excess over the legal limits, and to give the amount of that credit. So a cured breach leaves a written trace on your own copy. Look for it.

A breach found in week three is still a breach with a live deadline on it. The CFPB's own line to consumers is to ask the lender for the specific reason a fee changed before accepting it.

My own mistake was about where I looked rather than how hard. I compared the two totals, saw them land close together, and stopped there. A total hides a group-level breach without any effort at all: a $200 escrow increase that nothing caps will absorb, inside the total, a $200 underwriting increase that was never permitted. The bottom line reads fine while one group sits over its ceiling.

The columns hide a group breach as readily as the total does. Paragraph (f) of 1026.38 splits every charge on page 2 across borrower-paid, seller-paid and paid by others, each with an at-closing and a before-closing side, and only what you were charged bears on a tolerance at all. Build the three groups out of the borrower-paid columns, and do not skip the before-closing entries — an appraisal fee taken off a card in week one sits there, not in the at-closing column most people total.

Ten minutes, three columns, one email

Before your three-day review window closes, do this and nothing more.

1. Open both PDFs side by side. Loan Estimate page 2 next to Closing Disclosure page 2.
2. Rule three columns on paper: zero, 10% group, may vary. Put every increased line in one of them. Sections A and B and transfer taxes go to zero. Recording fees, and the services you shopped for and picked off the written list, go to the 10% group. Prepaids, escrow, property taxes and off-list providers go to may-vary.
3. Add up the 10% column on both documents. Multiply the Loan Estimate total by 1.10. Compare.
4. If anything in the zero column increased, or the 10% column is over its ceiling, send one email with the question quoted above and the figure you calculated.
5. Put a diary note on the date 60 days after your closing date. That is the outer edge of 1026.19(f)(2)(v), the day by which a refund and a corrected Closing Disclosure have to have arrived.

If a fee looks wrong and you cannot tell which group it belongs to, say exactly that, and ask the lender to name the group and the paragraph. It is a far easier request to answer than an accusation, and whatever comes back is checkable against the text linked above.

Two housekeeping notes. Regulation Z changes by rulemaking and nobody sends borrowers a notice when it does, so every figure above was read off the text linked beside it on the date printed at the top rather than recalled. If a paragraph in your own file reads differently from the one quoted here, write in through the contact form and name the section — I will open the source again, and a sentence that does not survive that gets rewritten rather than left where it is. Who is writing this, and what he is not, is set out on the about page. The rest of this section — what each line on the disclosure actually buys, and how the prorations at settlement are worked out — will sit under Closing Costs Line by Line.