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Ask Shop Rate: Lee, Riverside, CA

Posted by  on Apr 16, 2009
 
What is a "GFE" and why is it necessary? When a mortgage lender refers to a "GFE" they are speaking about a Good Faith Estimate. RESPA (Real Estate Settlement Procedures Act) requires that a mortgage lender or broker provide a consumer with a Good Faith Estimate prior to settlement.

The Good Faith Estimate includes an accurate and itemized list of fees, costs and rates associated with the mortgage quote given (also known as closing costs or settlement costs). Some of the standard fees you will see on the GFE include, taxes, title insurance, home inspection, appraisal fees, and processing fees. Some of these fees are relatively standard in the industry, some vary greatly from institution to institution.

It is highly recommended that any consumer who is shopping for a mortgage loan get multiple GFE's in order to compare costs between lenders. But remember a Good Faith Estimate is exactly that, an estimate and the final numbers you see at closing might be different based upon a number of factors (credit scores, LTV ratios, appraised value of the property, etc.).


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