A Good Faith Estimate referred to as a GFE must be provided by a mortgage lender or broker in the United States to a customer, as required by the Real Estate Settlement Procedures Act (RESPA). The estimate must include an itemized list of fees and costs associated with your loan and must be provided within three business days of applying for a loan. These mortgage fees, also called settlement costs or closing costs, cover every expense associated with a home loan, including inspections, title insurance, taxes and other charges.
A good faith estimate is a standard form which is intended to be used to compare different offers (or quotes) from different lenders or brokers. The good faith estimate is only an estimate. The final closing costs may be different sometimes very different.
Beginning January 1, 2010 brokers who arrange federally related mortgage loans must use the new Good Faith Estimate. Brokers who previously used the combined Mortgage Loan Disclosure Statement/Good Faith Estimate form, RE 883, must now provide two separate disclosure forms to borrowers when arranging federally related mortgage loans. The RE 882 Mortgage Loan Disclosure Statement and the new Good Faith Estimate required by HUD will together meet the disclosure requirements of the Real Estate Settlement and Procedures Act (RESPA) and the California real estate law. The disclosure forms must be provided to the borrower within 3 days of receipt of a loan application.
Brokers who arrange non-traditional mortgage loans are reminded they must provide borrowers with the Mortgage Loan Disclosure Statement/Good Faith Estimate, RE 885. They must be aware, however, that the Good Faith Estimate portion of the form is no longer sufficient to comply with the new federal requirements. The RE 885 must also be accompanied by the new Good Faith Estimate form for all federally related non-traditional mortgage loans.
Tennessee Good Faith Estimate (GFE) is a crucial document in the mortgage loan process that provides borrowers with an estimate of the costs associated with obtaining a home loan. The GFE is prepared by lenders or mortgage brokers and must be provided to borrowers within three business days of receiving their loan application. It plays a vital role in helping borrowers understand the financial aspects of their loan and compare offers from different lenders. The Tennessee GFE includes various key components such as: 1. Loan Terms: This section outlines the loan amount, interest rate, loan term, and type (fixed or adjustable-rate). 2. Origination Charges: It discloses the lender's fees, including application fees, underwriting fees, and any points charged. Points are upfront fees equal to a percentage of the loan amount. 3. Credit or Charge for the Interest Rate: It shows the interest rate and any credit or extra charges tied to it. 4. Escrow Account Information: If there will be an escrow account to collect funds for property taxes, insurance, or other costs, this section provides an estimate of the initial amount required. 5. Required Services that You Can Shop For: It lists services like title insurance, surveys, and pest inspections that borrowers can shop for themselves. Lenders must provide a list of providers for comparison. 6. Required Services that You Cannot Shop For: This section covers services such as the appraisal fee and credit report charges, which are typically chosen by the lender. Tennessee does not have any specific variations or different types of GFE. However, it is essential to note that the document may differ from lender to lender, but the overall structure and information provided remain consistent. The purpose of the GFE remains constant: to help borrowers understand the costs and terms of their loan, allowing them to make informed decisions and compare mortgage offers effectively.
