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Your lender is required by the Federal Real
Estate Settlement Procedures Act to provide you with a good-faith
estimate of the fees due at closing. This document, called the good-faith
estimate, or GFE, is supposed to be provided to you within three
days of applying for a loan. The requirement is satisfied if the
good-faith estimate is mailed within three days.
The closing fees, also called settlement costs, cover
almost every expense associated with your home loan. Because closing
costs typically amount to between 3 percent and 5 percent of the
sale price, it is best to wait until you receive the good-faith
estimate before committing to a loan. Smart shoppers obtain good-faith
estimates from two or more lenders, compare their costs and ask
questions about any large discrepancies.
Here's a list of some of the fees you'll find listed
on your good-faith estimate:
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Good-faith estimate fees |
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Origination
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Settlement, closing or escrow fee
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It's just an estimate
The good-faith estimate is just that -- an estimate. The lender
directly controls some of the fees, and those are the ones to pay
the most attention to when you are comparing offers. Some fees are
performed by third parties, and usually don't vary much from lender
to lender. Other expenses are under your control, and there are
taxes and government fees that should be the same, regardless of
the lender.
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Chapter 4: Paperwork and fees
