*As of  October 2015, the Good Faith Estimate, or GFE, has been replaced by the Loan Estimate. Find out more about Loan Estimates and other changes here.

The Good Faith Estimate, or GFE, is an extremely important part of the mortgage process. As a mortgage consumer or client, the GFE is the main way you compare and understand the costs and fees of a mortgage. Home loan lenders are required to provide a GFE to all clients as part of the Real Estate Settlement Procedures Act (RESPA). The GFE must include an itemized list of fees/costs of getting the mortgage and must (by law) be provided within three days of applying for a loan. The costs listed on the GFE are commonly referred to as closing costs, and the GFE isn’t final. The costs can change for a variety of reasons; one of the most common reasons is that the mortgage rate changes and costs are affected (either up or down). For example, when I got my 15-year VA loan a few years back, my home appraised for about $25,000 than I had estimated. Because of that, and because my GFE was prepared on the estimated lower value, the LTV (loan-to-value) of my mortgage improved and my rate actually dropped a little bit. As you can imagine, I was one happy veteran. One other thing to note is that the GFE third-party costs can only rise 10% from the estimate. The fees included within a Good Faith Estimate fall into two categories, lender fees and third-party fees. Here are some examples of fees you might have to pay:

Lender Fees

  • Loan origination fee
  • Processing fee
  • Underwriting fee
  • Inspection fee
  • Points

Third-Party Fees

  • Appraisal fee
  • Title search and insurance
  • Home inspection
  • Government recording fee
  • Tax certification

I could go on for days about GFEs, but instead, I think you’ll prefer watching my friend Jenna Bush discuss them in the video below. Jenna has over a decade of experience as a Home Loan Expert and loves sharing the knowledge she’s gleaned over the past 10 years. With that, I hope you enjoy the video and find it useful. Tell us what you think in the comments, and let us know if there are any topics you’d like us to present in our next video on the Zing blog. Have a great day.

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This Post Has 6 Comments

    1. Hi John:

      I’m going to remove the personal information here, but someone will be reaching out.

      Thanks,
      Kevin Graham

  1. purchased a home with a loan from you. amounts of monthly payments do not match. get back to me to explain difrence of payment. 5402382012.what shuld a 30 year loan at 3.84 com out to

    1. Good morning, Sheldon. I’m going to have a client care specialist reach out to you to discuss your situation. Have a nice day!

    1. Hi Rachel! Are you working with a specific banker? If so, we can connect you with your banker to discuss the estimate.

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