The Good Faith Estimate (GFE) is a good way to be able to compare one home lender from another. The GFE must be provided by a mortgage lender or broker as required by the Real Estate Settlement Procedures Act (RESPA). The estimate must include an itemized list of fees and costs associated with your loan and must be provided within 3 business days of applying for a loan. The fees or closing costs, cover every expense associated with a home loan including inspections, title charges, bank fees and escrow items. By comparing GFE’s between lenders you can determine what lender may offer the best loan package for you.
However, your decision on what lender to use isn’t always based on the costs. A lender offering a lower interest rate may have substantially higher costs that when calculated over the life of the loan may actually cost you more in the long run. But again the GFE is the only way for you to be able to make an apples to apples comparison. Look for future posts about changes to a lender's good faith estimate taking effect in January 2010.
As a numbers guy, I love home financing. If you find the home of your dreams this weekend, please give me a call. I’d love to visit with you about what type and size of loan best fits YOUR needs. Call me at 308-233-4553 or email me at cory@century21midlands.com.
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