What is a Good Faith Estimate?
Required by federal law, the Good Faith Estimate (GFE) is a written list of the estimated closing costs associated with your mortgage transaction, including the lender’s charges along with the local closing agent’s charges and fees. It also includes estimated amounts for real estate property taxes and homeowner’s insurance. Once you’ve been approved, you can access your GFE online from your “My Loan Status” page.
Your lender or loan agent must provide you with a good-faith estimate within three days of your application. This is the information you need to make a fair and accurate judgment when shopping for a loan. Your estimate is a written document that shows all the costs that can be estimated in advance by the lender. You need this information so there are no surprises on the day you close your sale on the property to be purchased. You will be expected to pay closing costs. You should review all costs, know which are non-refundable in the event your loan is not approved, and be prepared to pay outstanding fees at closing. You may also want to compare these costs to those charged by other lenders when shopping for your home plan.
A good faith estimate is an estimate of fees, including settlement costs such as title insurance and taxes, which are due at closing. This statement must be given to the potential borrower by the mortgage lender within three days of completing a mortgage loan application. Good faith estimates are used to compare against other quotes from different lenders. Potential borrowers must keep in mind the good faith estimate is merely an estimate and not a statement of actual costs which in reality may be very different from the good faith estimate values.
