Good Faith Estimates can be scary. There are tons of lines, numbers, names and you probably feel like you are missing something. If it sounds too good to be true then it probably is.

Good Faith Estimate (GFE) Explanation

A good faith estimate (also referred to as the “GFE”) is a RESPA mortgage disclosure document that outlines all the fees and charges associated with a mortgage.

Along with the fees and charges, the GFE has your mortgage amount, interest rate, term, payoff amounts for a refinance, and your proposed mortgage payment.

The GFE also discloses estimates for any escrows that have to be paid at closing for taxes and insurance and the amount used to fund your escrow account for future escrow payments.

A Good Faith Estimate form can look different for different companies. So, it’s hard to give you a sample of one because they all can look different.

Try getting several Good Faith Estimates close to the same time. Then, compare the different costs and rate. Just go line by line and note any drastic differences in certain fees. Also, check your escrow amounts. Some lenders leave out the escrow amounts to make the GFE look better.

However, I break down the parts of the Good Faith Estimate in the closing costs article.

A good faith estimate by law has to be provided to you within 3 business days of the mortgage application. A good faith estimate is only as good as the mortgage originator providing it.

Since it is an “estimate” the loan officer or company is in no way required to deliver the rate, costs, and escrow estimates disclosed. Just because you sign a good faith estimate with a rate and costs does not mean you will show up to the closing with that same rate and costs.

They are required to redisclose if the APR changes by .125% or certain other things change and you can read those in the article, When is a lender required by law to redisclose the loan?

One last note…never sign a blank good faith estimate. It is even illegal to ask a borrower to sign a blank GFE or loan application.

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