A good faith estimate (GFE) must be provided by a mortgage lender or broker in the United States to a customer. The estimate must include an itemized list of fees and costs associated with the loan and must be provided within three business days of applying for a loan. These mortgage fees, closing costs and pre-paid items cover every expense associated with a home loan from legal fees, recording fees, title insurance, taxes and other charges. A good faith estimate is a standard form which is intended to be used to compare different offers (or quotes) from different lenders or brokers.
The good faith estimate is only an estimate. The final closing costs may be different; however the difference can only be 10% of the third party fees. Once a good faith estimate is issued the lender/broker cannot change the fees in the origination box.
It is important to look at everything that is listed, but it is especially important to see if additional costs are being built in such as Points, Broker Fees or high Administrative fees. In all, a consumer should look at the bottom line number of the cost; one, to make sure it is affordable to them and two, to be sure the costs are accurate and not over inflated in any way. Click for more details about closing costs.
For more information about the good faith estimates or if you have questions regarding other home financing, please email me at bill@billnickerson.com or call me at 978-273-3227
The Mortgage Markets 