The Good Faith Estimate is an important and frequently misunderstood document you will encounter whenever applying for a mortgage loan. What is a Good Faith Estimate and what is it really good for?
Mortgage lenders are legally required to provide you a Good Faith Estimate within three days of receiving your application. Keep in mind that the Good Faith Estimate is simply that…an “estimate.” Your mortgage lender is not obligated to stick to quote they’ve given you. Many people think that because they sign a Good Faith Estimate they’ve locked in the terms of their loan and nothing could be further from the truth.
The terms of your loan are not final until you sign the loan contract and have the HUD-1 statement from the lender. Good Faith Estimates can be usefull for screening loan offers; however, important fees and markup like Yield Spread Premium are frequetnly left off them completely. If you want to get the lowest possible payment and mortgage rate from the best lender possible you’ll need to spend time researching mortgage lenders and find the right broker to originate your loan.
You can learn more about finding the right mortgage broker that will work for an origination fee without charging you Yield Spread Premium by registering for this site’s free mortgage videos.
My name is Robert Regehr and I’m a personal finance blogger with a chip on my shoulder for banks and mortgage brokers that take advantage of my friends and neighbors.
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