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Debbie Siegel's Mortgage Minute
The Good Faith Estimate - Don't Leave Home Without It!
A required disclosure, the Good Faith Estimate (GFE) breaks down the costs associated with obtaining a mortgage. Your broker or lender is required by law to supply you with a GFE within three days of making a loan application.
Costs incurred through third-party providers, such as the three major credit bureaus, title companies, and insurance companies, usually don't have wide variations between one lender and another. Other costs, such as those listed in the 800-series of the line items, do vary and this is where you should focus when evaluating a lender, as it's not just the mortgage rate itself that will impact your bottom line. These items include charges for courier, wire transfer, broker fee, origination fee, and discount points.
As the document name states, the GFE lists estimated costs, not exact costs, but as long as the GFE is made in "good faith," lenders can charge higher costs at closing if necessary. If the closing attorney spends more time than originally estimated in completing your file, for example, that cost will increase.
But a big red flag should go up if other items from the GFE change dramatically by the time you're ready to close. If your points, origination fee, or mortgage broker fee differ substantially from the GFE, you should investigate. More importantly, if you weren't supposed to be charged one of these items per the GFE, and it pops up on your closing statement, ask why. While things can change as rates fluctuate, you shouldn't encounter any surprises at the closing table. In fact, substantial changes require new disclosures.
* Next 37 17 investors only!
To protect your interests, and your pocketbook, bring your GFE to the closing and compare the charges. Read before you sign, and don't be afraid to call a discrepancy to the attention of the lender or the closing attorney. Deal with people you know and trust, and as always, seek the help of a mortgage or financial professional.
Got questions about real estate financing? Contact
Debbie@westchester-mortgage.com
or 617-965-1236. She'll consider them for
inclusion in a future column. Debbie Siegel is president of Westchester
Mortgage in Newton, Mass. She is licensed in several Northeastern states.
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