Table of contents
Chapter 1: Should you buy or rent?
Chapter 2: How mortgages work
Chapter 3: Your mortgage payment
Chapter 4: Paperwork and fees
Chapter 5: Underwriting
Chapter 6: Closing
Chapter 7: Ownership
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.
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:
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 generated 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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A bunch of agencies are trying to expand the number of would-be homeowners who can qualify for mortgages. But I'm skeptical that these efforts will help many people.
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