Comments Off | Thursday, February 11, 2010
When you apply for a home loan, a lender is required to provide what’s know as a mortgage good faith estimate, often abbreviated as GFE, to you within three days or less.
Although the good faith estimate should be accurate, lenders aren’t necessarily legally bound to their GFEs. However, most lenders try to honor good faith estimates as closely as possible in order to avoid developing a bad reputation with customers.
The GFE should cover closing costs and the amount of cash the borrower needs to close on the agreement. It should also detail which if any prepaid expenses must be handled and the average monthly payment the borrower will have to countenance to keep up with the loan. Therefore, the mortgage good faith estimate should give you a fairly good idea of what you will ultimately have to pay.