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Mortgage · 12 CFR 1026.19(e)Closing costs higher than the Loan Estimate: what the lender may and may not raise

The Loan Estimate is binding within set limits. Fees paid to the lender, the mortgage broker or their affiliates, third-party fees when the lender did not let you shop, and transfer taxes may not increase at all (12 CFR 1026.19(e)(3)(i)). Recording fees and third-party services you were allowed to shop for, if you picked from the lender's list, may increase only 10% in total (§1026.19(e)(3)(ii)). Prepaid interest, homeowner's insurance and escrow deposits can change if the estimate used the best information available (§1026.19(e)(3)(iii)). The lender may use a higher figure only for a listed reason – a changed circumstance, your requested change, locking the rate, or your intent to proceed more than 10 business days after the estimate – and must send a revised estimate within three business days (§1026.19(e)(3)(iv), (e)(4)). Anything charged above the limits must be refunded within 60 days after consummation (§1026.19(f)(2)(v)).

The three tolerance buckets

  1. Zero tolerance

    Fees to the lender, broker or their affiliates; third-party fees when you could not shop; transfer taxes (§1026.19(e)(3)(i)).

  2. 10% in total

    Recording fees and shoppable third-party services from the lender's list – the sum may rise up to 10%, not each fee (§1026.19(e)(3)(ii)).

  3. No limit if in good faith

    Prepaid interest, homeowner's insurance premiums and amounts put into escrow (§1026.19(e)(3)(iii)).

  4. Valid reasons to revise

    Changed circumstance, changed eligibility, your requested change, rate lock, or proceeding after 10 business days (§1026.19(e)(3)(iv)).

  5. Revised estimate timing

    Within three business days of learning of the reason (§1026.19(e)(4)(i)).

  6. Cure

    Excess over the limits refunded, with a corrected Closing Disclosure, within 60 days after consummation (§1026.19(f)(2)(v)).

How to check your Closing Disclosure

  • Put the Loan Estimate (or the last valid revised one) next to the Closing Disclosure.
  • Compare lender and broker fees and transfer taxes line by line – any increase is a problem unless a revised estimate explains it.
  • Add up recording fees and shoppable services from the lender's list and compare the totals – more than 10% over is too much.
  • Look for a lender credit for the excess on the Closing Disclosure, or ask for the refund.

What the TC watches

  • Late changes – a new lock, a repair, a changed loan amount – that can trigger a revised estimate and new timing.
  • Transfer taxes on the estimate that differ from the statutory amount.
  • The 60-day refund window if the buyer was overcharged.

Questions buyers ask

Can closing costs be higher than the Loan Estimate?

Some can. Lender, broker and affiliate fees and transfer taxes cannot rise; recording fees and shoppable services from the lender's list can rise 10% in total; prepaid interest, insurance and escrow can change.

What is the 10% tolerance?

The sum of recording fees and third-party services you could shop for, when you used the lender's list, may not exceed the estimate by more than 10% (12 CFR 1026.19(e)(3)(ii)).

What if the lender charged more than allowed?

The lender must refund the excess and deliver a corrected disclosure within 60 days after consummation (§1026.19(f)(2)(v)).

Related guides

Store the Loan Estimate and Closing Disclosure on the deal in ClosingCode and add a task to compare them, with an owner and due date before closing.

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Source: Regulation Z, 12 CFR 1026.19(e)(3), (e)(4) and (f)(2)(v), with official interpretations (consumerfinance.gov, read October 25, 2026).

General information, not legal or financial advice. ClosingCode is software; it is not a law firm, lender or brokerage. This guide is not a substitute for the advice or services of an attorney.