What is a Good Faith Estimate (GFE) in relation to mortgages?

by alf.kerluke , in category: Real Estate , 7 months ago

What is a Good Faith Estimate (GFE) in relation to mortgages?

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1 answer


by chelsea , 5 months ago


A Good Faith Estimate (GFE) is a document provided by lenders to borrowers during the mortgage application process. It includes an estimated breakdown of the costs and terms associated with obtaining a mortgage. The purpose of the GFE is to give homebuyers clear and detailed information about the potential expenses they may incur when securing a loan.

A typical GFE lists various fees and costs such as the loan origination fee, appraisal fee, credit report fee, title charges, escrow fees, and other third-party charges. It also provides an estimate of the total closing costs and the down payment required to complete the mortgage transaction.

The GFE is regulated by the Real Estate Settlement Procedures Act (RESPA) in the United States and serves as a disclosure tool to help borrowers compare loan offers from different lenders. It allows them to understand the overall financial implications of a mortgage and make more informed decisions when choosing a loan product. However, it is important to note that the GFE is just an estimate, and the actual costs may vary at closing.