Good Faith Estimate

"What is a good faith estimate? Will that be my total costs at the closing table?"

In 1974, the Department of Housing and Urban Development (HUD) enacted the Real Estate Settlement Act (RESPA). RESPA requires mortgage brokers and lenders to give home buyer a Good Faith Estimate of the closing costs. This estimate must be provided within three business days of when the loan application is taken. This estimate is a list of fees involved with you loan. Note: these numbers are not set in stone, they are an estimate but should be close to actual fees.

A GFE (Good Faith Estimate) provides a break down all the fees that you will have to pay as a borrower at time of close. These fees can all be explained to you by your mortgage professional

The fees on the Good Faith Estimate are just that an estimate and can change. Although a good mortgage professional should be able to quote fee's quite accurately. Always compare the final Good Faith Estimate you sign at close with the estimate you signed with your mortgage broker when you applied.

For an accurate Good Faith Estimate, you should provide your loan officer with all of the requested income, asset, and liability documentation. If you fail to include some documentation then the terms listed on the good faith estimate are subject to changing.

One of the things that can cause the estimated charges to change is the date of the closing. If you close before the estimated date, there will be more interest to pay.

remember a good faith estimate is just that, an estimate, and variations from the good faith estimate to the final closing documents can be explained clearly and plainly by your loan officer.

» DISCLAIMER: The information contained in this article on 'Good Faith Estimate' is a collection of contributions by licensed mortgage professionals and is not the opinion of Broker Outpost LLC. Always consult a licensed professional before applying for a mortgage.