What is a Good Faith Estimate and what are points?
When you file your application for a loan, the lender and broker must, under the terms of RESPA, provide you with a Good Faith Estimate of settlement services that will likely occur. The estimate may be stated as either a dollar amount or a range for each charge. A point is equal to 1% of the loan amount. It is the typical amount that a broker or bank will charge to complete a loan. Or, the interest rate can be increased so that the compensation comes directly from the lending institution to the broker.
