The Consumer Financial Protection Bureau is in charge of administering and applying laws pertaining to finances. The Real Estate Settlement Procedures Act (RESPA) is a federal regulation that specifically pertains to real estate and loan proceedings, including mortgages. One of the guidelines by RESPA is the stipulation that a Good Faith Estimate (GFE) be given to all individuals who apply for a mortgage. This blog provides information on home loan good faith estimates for Philadelphia home buyers.
Good Faith Estimate Definition
A Good Faith Estimate itemizes closing costs, interest charges, and other expenses associated with acquiring a home loan from a particular lender. It is meant to permit real estate purchasers to compare plans provided by individual lenders and to disclose the overall charges involved with obtaining a mortgage. Lenders are obligated to furnish a GFE within 3 days of a buyer application.
What Can Vary With Good Faith Estimates
Some costs in GFEs are administered individually by a lender while others (such as recording costs) are determined by municipalities where the documents will be put on record. Lender determined items, such as underwriting costs, differ from one lender to another and reviewing GFEs is how you can notice those variations. Keep in mind that a GFE is just an estimate calculated by facts applicable at the time of the loan application. Some items may not increase, some may change by a maximum allowable percentage, and others can increase or decrease based on your closing date or other factors. Ask your mortgage professional about which costs can increase or decrease if you are worried about possible increases.
Interpreting Home Loan Good Faith Estimates For Philadelphia Home Buyers
Although GFE documents have been amended during recent years, it can still be a little complex to comprehend. Ask your lender or legal representative to explain the data in the GFE and make sure that you understand it before proceeding with a particular loan.