The Consumer Financial Protection Bureau is responsible for overseeing and imposing regulations relating to monetary transactions. The Real Estate Settlement Procedures Act (RESPA) is a federal law that specifically pertains to property and financing proceedings, including mortgages. One of the guidelines by RESPA is the requirement that a Good Faith Estimate (GFE) be sent to all parties who apply for a mortgage. This blog offers information on mortgage good faith estimates for PA home buyers.
Definition of a Good Faith Estimate
A Good Faith Estimate itemizes closing costs, interest percentages, and additional fees associated with receiving a home loan from a certain mortgage company. It is intended to allow home purchasers to understand plans provided by individual lenders and to disclose the total costs connected with obtaining a loan. Lenders are obligated to supply a Good Faith Estimate within 3 days of a mortgage application.
What Can Vary With Good Faith Estimates
Various charges in GFEs are determined individually by a mortgage company while others (such as recording fees) are controlled by municipalities where the documents will be filed. Lender specified items, such as underwriting charges, vary from one lender to another and reviewing GFEs is how you will understand those variations. Keep in mind that a GFE is merely an estimate based on information applicable during the mortgage application. Some items are required to stay the same, some can increase by a limited percentage, and others may be determined by your closing date or other factors. Ask your mortgage professional about which costs can increase or decrease if you are worried about increases.
Interpreting Mortgage Good Faith Estimates For PA Home Buyers
Even though GFE layouts have been updated during recent years, it may still be somewhat complicated to understand. Ask your mortgage professional or attorney to explain the details in the GFE and make sure that you understand it prior to moving forward with a specific mortgage.