Comparing Good Faith Estimates (GFE's)


Comparing Good Faith Estimates (GFE's)
By Scott Rogers • November 4, 2008
I always encourage my buyer clients to talk with at least two lenders. Different lenders offer different loan programs, closing costs, incentives, and more. Often, however, this leads to comparing what can be two very confusing documents --- the good faith estimates from each lender. The Good Faith Estimate is a document intended to outline all of your purchasing costs, and thus is a good document to use when deciding between your two favorite lenders. But it can often be quite difficult to make the comparison because costs can have so many different names on the GFE, and because there are non-lender fees included in these estimates. If you are deciding which lender to use based on closing costs, remember to subtract out all of these costs before you make the comparison: appraisal fee title search/exam title insurance attorney fees recordation fees city/state transfer taxes survey homeowners insurance premiums insurance and tax escrows All of these costs are independent of your lender or loan program. For example, you will pay a title company or attorney to handle the closing, but the cost of such will not be determined by your lender. If one lender estimated that fee on your GFE as $400, and the second lender estimated the fee to be $250, you would assume the second lender was offering you a superior loan program, when in fact you would ultimately pay the same cost for your title company regardless of which lender you choose. I hope I haven't complicated things further --- just remember that you should not just look at the bottom line of the Good Faith Estimate when you are comparing lenders. Receive Updates by Email Recent Articles: An Absence Of Competing Listings In A Broad Price Range Does Not Mean You Can (Or Should) Round Your List Price Up To The Top Of That Range The First Buyer To Make An Offer Will Likely Not Include An Escalation Clause, At Least Not At First Home Buyers Seem To Be Drawing The Line In A More Rational Place Now When Making Offers Buy A House For Yourself, Not The Next Owner Home Sellers Will Not Voluntarily Sell Their Homes For Lower Prices Because Of Higher Interest Rates Unless Competition Forces Them To Do So Homes Are Still Selling Quickly, So You Should Know (Or Think About) Where You Are Going Next Before You List Your Home For Sale Are You Ready To Sell Your Rental Property? Should We Let Buyers View Your Home Before It Hits The Market? Almost Half Of Homes For Sale Are New Homes Where Are Most New Homes Being Built Right Now?
Have any questions? Contact Scott Rogers at 540-578-0102 or scott@funkhousergroup.com
Based on information from the Harrisonburg-Rockingham Association of REALTORS® or its MLS, for the period Jan 1, 2000 through May 28, 2023 (unless otherwise noted).
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