Information for Buyers: Good Faith Estimate
Several years ago the U.S. Congress tried to protect consumers from unscrupulous lenders by requiring the lenders to calculate and disclose the annual percentage rate or APR you would pay on your mortgage. An equally important requirement is for the lender to provide a written Good Faith Estimate of settlement costs or GFE.
When shopping for a mortgage loan you will want to have both an APR and GFE from the lender to understand the total cost of the loan and compare these figures to those of another lender.
When you are reviewing the GFE, keep in mind the lender only controls some of the costs that are shown on the estimate. Other parties control much of the cost such as the appraisal, title insurance, county recording fees, taxes, survey, and the pre-paid expenses for the home owner’s insurance, mortgage insurance, real estate taxes, etc.
What the lender controls are things like origination fee, discount points, and mortgage related expenses. A review of all of these costs will help you understand the total cost of the loan you are requesting.
We have learned this information through years of experience. However, we are sure your situation might be different. That's why WE ARE HERE. It is our job to personally advise home buyers and sellers. Ask us if any of the information here applies to your situation.
If you have any questions about the information you have found here or somewhere else, ask us. We will respond quickly without cost or obligation.