When you are signing off on a loan large enough to pay for a house, you want to be absolutely sure that everyone involved is operating in good faith. While Wyndham Capital Mortgage strives to attain the highest ethics in its procedures, not every lender has the same practices. The closing table is no place for a surprise. You should know within a reasonable margin of error what you will be expected to pay before you arrive.
The Real Estate Settlement Procedures Act (RESPA) which passed in 1974 endures just that. It requires a lender to provide a Good Faith Estimate (GFE) to every borrower. This document gives you a solid approximation of the fees and costs associated with your loan.
What is a GFE?
A GFE is still an estimate, so don’t expect it to be exact down to the penny. However, it should accurately represent your closing costs. A reformation of RESPA went in to effect on January 1, 2010 and it says that any major discrepancies come out of the lender’s pocket, not yours. It’s in the best interests of both parties to get it right.
How can I get one?
Your lender should provide you with a GFE within three days of your application. This is required by law; don’t let them slide on this document. You should not have to hunt it down or ask for it for make sure your lender has all your contact information. Check your spam filter files in case your lender used e-mail for delivery.
Why do I need a GFE?
A GFE can help you comparison shop for rates or lenders so be sure to go over the costs and fees carefully. It can give you negotiating power if you have a GFE from more than one lender and the fees are much higher. A GFE gives you a great deal more security going into the loan process. A GFE shows you that your lender is worthy of your trust.
Will anything else do?
Make sure what you receive is a true Good Faith Estimate. Ask for by name. Some lenders try to get by with a “work sheet” which may not be guaranteed to be accurate and will give you no recourse should it be grossly incorrect. Windham Capital Mortgage always strives to be accurate and ethical in providing our Good Faith Estimates.
If you do not understand the fees or cost outlined in the document, ask one of our associates to go over the paperwork with you and explain how it works.
