The Good Faith Estimate is a disclosure of all of the costs that are associated with the settlement of your mortgage loan. Loan officers are required to provide you with a good faith estimate within three days of applying for a mortgage loan.

Many mortgage consumers make the mistake of thinking the estimate is set in stone. There are simply too many numbers that will be juggled around throughout the loan process to know for certain what your costs will be. Most often the exact amount isn’t known until days or even hours before closing.

Most loan officers will do their level best to make sure that the good faith estimate they provide will be accurate. Some will even guarantee the amount. If the amount increases from what they quote, then they will eat the cost out of their own paycheck.

Always read everything you are handed with a fine tooth comb. Even mortgage professionals can make mistakes. Never be shy and always speak up if you are feeling uncomfortable about something. Remember, this is your loan.

If the parameters of your loan change during processing, ask your mortgage professional for a revised good faith estimate reflecting the changes. While they are obligated to do so anyway, this requirement may be overlooked.

The good faith estimate is just that, and estimate. The mortgage professional may need to increase your loan amount to cover certain costs associated with your loan. Your current payoff could come in higher than expected, and this will certainly change the GFE. It is not set in stone, until you sign the final HUD settlement statement at the closing table. Although it is not set in stone, it should not vary drastically from the original that you signed, and you should keep that in mind at the closing table.

Some unethical companies may deliberately mislead you on your Good Faith Estimate. They may show a rate or fees that vary drastically from the actual terms that show up on your loan documents. Or, they may provide you with disclosures that show you are getting a 30 year fixed loan, but the loan documents will be for an adjustable mortgage. They will do this because they figure that by the time you get to the signing table, you'll be so anxious to close your loan that you'll just sign anyway. This is sometimes referred to as a "table close". If a company tries to do this to you, you should not sign anything that you're not comfortable with. Don't be afraid to walk away. There are always other options. Just as in any industry, some people don't have your best interests in mind.

 

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