Mortgage good faith estimate

Mortgage lenders have a responsibility to give a loan seeker what is called a good faith estimate of the closing costs. This estimate is a must and one must thank the Federal Real Estate Settlement Procedures, Act for this.

A Good Faith Estimate is also called GFE, and this GFE needs to be given to the loan seeker within three days of loan applied for. Although it does not say that GFE has to be in the loan seekers hands, it should have been prepared and t least mailed to you in three days time.

GFE gives you an idea of the maximum sale price for a property and you need not waste time and energy on an over-priced property or vice versa. You can find an area in your price range that suits your needs as well as narrows down your search. You can also determine your monthly payments approximately with the GFE.

These monthly payments include the property taxes, insurance, principle and interest, and other private mortgage insurance payments. If the monthly payments come higher than your expectations, you can adjust your sales price down and vice versa to be lower.

The Good Faith Estimate is an estimate of different fees and listed down hereunder are some of them you would see in a GFE.

Rate lock fee
Attorney fee
Notary fee
Application fee
Insurance fee
Assumption fee
Commitment fee
Credit report fee
Mortgage broker fee
Discount points fee
Wire transfer fee
Lender's inspection fee
Title examination fee
Pest inspection fee
Property appraisal fee
Origination points fee
Tax related service fee
Document preparation fee
Condominium application fee

A GFE is nothing more than that. However, when closing costs it could be much higher. Remember that not all of the closing fees will come from the mortgage lender but you will need to keep a track of these fees and compare them closely with the other estimates that you have received. There are some parts of the closing costs, which are regulated by the Federal government and they are exactly the same irrespective of the lender you choose.

However there are certain fees that are under the control of mortgage lender. Meaning there is always a scope of getting a good bargain if dealt with good negotiations. These include:

Application fee
Credit report fee
Discount points fee
Origination points
Taxes services fee
Rate lock fee
Wire transfer fee
Assumption fee
Underwriting fee
Commitment fee

When you search you could get some mortgage lenders who cut some of their fees out completely.

Then there is what is called as third party fees, which cannot be altered by anyone including the mortgage lenders. These fees cannot be negotiated down. However, if you find a significant difference in third party fees between two lenders, then you have all rights to ask for a come down. These fees include:

Settlement fee
Examination fee
Service fees
Lawyer fee
Documents preparation fee
Title search fee
Title insurance fee
Appraisal fee