Understand Your Good Faith Estimate

When someone applies for a mortgage loan to purchase a home or refinance an existing mortgage, the lender is obligated to provide a document to the applicant called a Good Faith Estimate. A GFE essentially outlines the fees associated with obtaining the proposed mortgage loan and breaks down the projected total monthly payment.

A Good Faith Estimate is broken down into several parts that include lender fees, title charges, government and transfer charges, pre-paid items, reserves required by the lender, and additional settlement charges associated with the mortgage transaction. While the fees on the GFE cannot be exact, the lender portion should be accurate for the proposed loan.

Once you have initiated an application with a lender to purchase a home or refinance, ask to sit down in person with that lender to go over your Good Faith Estimate. Ask questions about fees on the estimate that you do not understand and shop another lender if something does not add up.

If you are looking to purchase a home or refinance contact Rebecca Cole. Committed to excellence!