"Good Faith Estimate"

Your lender is required by the federal Real Estate Settlement Procedures Act (RESPA) to provide you with a Good Faith Estimate of the fees due at closing within three days of applying for a loan. These fees, also called settlement costs, cover every expense associated with your home loan: inspections, title insurance, taxes and all other charges.

The purpose of the Good Faith Estimate is to provide the borrower with the information needed to shop for a loan effectively. Borrowers who submit an application through a mortgage broker will receive a Good Faith Estimate from the broker.  After the application is sent to the lender, the borrower will receive a second Good Faith Estimate from the lender. The lender’s Good Faith Estimate supersedes the broker’s. Just after closing, the borrower may receive a preliminary HUD1, which is a closing document similar to the Good Faith Estimate except that the fees are closer to being final. A borrower is entitled to see a preliminary HUD1 the day before closing, but it may not be complete or accurate. Settlement costs are not known with certainty until the closing when the borrower receives the final HUD1.

Services provided by third parties, such as title insurance, inspections, taxes or closing-related services, present a challenge since brokers and lenders may not know the exact charges for these services. 

We strongly recommend that you obtain a Good Faith Estimate from ANY Lender that you chose to do business with before doing business them. You should not have to pay an application fee to know what a Lender will charge you. Remember, you are ENTITLED to this information. Don’t let other companies tell you otherwise.

Because the government won't protect you from an inaccurate Good Faith Estimate, you have to watch out for yourself. You have to review the estimate critically and ask questions.

Typical Closing Costs

Here is a list of typical closing costs. In general, closing costs amount to 3 percent to 6 percent of the sale price.

 
Andre Plessis

Andre Plessis
"The Mortgage Guru"
"A Mortgage Professional whose primary goal is to provide the expertise, guidance and skills necessary to obtain the best mortgage to meet your personal needs".
View Client Testimonials

P.S. If you are at all intimidated or unsure about the mortgage process if you don’t understand how to evaluate your options in getting a mortgage loan our 15 key questions will help you feel comfortable that you are making the best decisions. Also if you are in the process of refinancing your home with anyone, CALL ME and I will let you know if you are being offered the best loan option based on market conditions and your financial situation.

Copyright 2005© Apply-Free.com