If closing costs are less than the Loan Estimate, what does this indicate?

If closing costs are less than the Loan Estimate, this indicates that the lender has made a good faith effort in estimating the costs associated with the loan. The purpose of the Loan Estimate is to provide borrowers with a clear and accurate projection of the fees they can anticipate at closing.

When the actual closing costs come in lower than what was originally estimated, it suggests that the lender was conservative in their estimates and potentially worked to keep costs down. It reflects positively on the lender's practices and transparency in the loan process, fulfilling their obligation to provide an accurate upfront disclosure to the borrower.

In contrast, if the closing costs had exceeded the Loan Estimate, it might raise concern about whether the lender acted in good faith or met regulatory requirements concerning disclosures, but that is not the case in this scenario.