by Roshan Richards

Created on: September 15, 2009   Last Updated: September 17, 2009

It is required by law that anytime you apply for a mortgage loan you be given a Good Faith Estimate (GFE) by the mortgage specialist from whom you are applying for financing. In its simplest terms, a GFE is usually an itemized list or breakdown of all of the estimated charges and fees that will be required for you to pay at closing before your loan can fund. Sometimes lenders will give you an abridged or "simplified" GFE that shows the end result but not how those numbers were derived. Ask for an itemized GFE, like the

example (click on "My Share" document to download and print) here so you can see exactly why you are being charged that $500 for a miscellaneous fee. In either case, GFEs can be sobering to say the least, but they do not have to be confusing.

Any mortgage specialist who is an advocate for the buyer or home owner will take the time to explain the GFE in detail, but it is common for consumers to forget most of what was explained once back home. And, unfortunately, there are some unscrupulous people in every industry so it may be beneficial to have a guide map on how to read this intimidating document so you will know what questions to ask and possibly how to save yourself a little bit of money in the process. So grab your GFE or click and download this sample and follow along.

VERY TOP LEFT - lists all qualifying buyers (applicants) who are applying for the loan, followed by the property address being purchased or refinanced, and the lender that the GFE was prepared by.

VERY TOP RIGHT - the application number is the loan number assigned by the lender that will be used to track your loan through its underwriting process, followed by the date of the preparation of the GFE and the type of loan program this particular GFE represents.

Read the paragraph that follows the very top items and you will get a reminder that these are yet again estimated charges from the various entities that service your loan. Do understand that they should be fairly accurate and within a hundred dollars or so. If your fees change throughout the process, which can happen for various reasons like a rate change before locking or a change in the closing date, to name a few, then your lender should reissue you a new and updated GFE to reflect the new costs so you are not negatively surprised at the closing table.

Directly below this paragraph, and before the itemizations start, you will see a listing of: loan amount, interest rate, and term. Double check these numbers to make

• 1
• 2
• 3
• 4
• 5
• 6
• Next Page >>