What is a Good Faith Estimate?""

A "good faith estimate" lists the fees and costs you will have to pay when you close on your home loan. It is required by the Real Estate Settlement Procedures Act, and a lender must provide it within three days of the date you apply for a mortgage. A good faith estimate doesn't obligate you to any particular lender. It does give you good information with which you can "go shopping" for the best loan with the most reasonable settlement costs.

Costs typically included in a Good Faith Estimate are:

  • Property appraisal fee
  • Title search and insurance fees
  • Transfer taxes
  • Inspections fees
  • Survey fees
  • Loan application fees
  • Costs of obtaining your credit report
  • Points and origination fees
  • Recording fees

Some of these fees are set and will not fluctuate, but things like points and origination fees can change - sometimes daily. So it's important to remember that a good faith estimate is only an estimate. It gives you a good general idea what your closing costs will be, but the final number is likely to change.

If you get good faith estimates from several lenders, we recommend that you request updated numbers from the lender you decide to work with. Though good faith estimates are meant to protect the consumer, lenders and brokers aren't required to update them if something changes. So request the update and make sure you're not surprised the day you close on your loan.

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