My New Blog

Keith Siess

Country Home Lending Source

Phone 405-360-1995

 

Deciphering the New Good Faith Estimate
No more surprises. Borrowers now know exactly what they'll need at closing.

Mortgage rates are still incredibly appealing, driving many homeowners to refinance and home shoppers to lock in their rates. But before you sign on the dotted-line, it is important to know precisely what you'll need to “cough up” at closing.

Thanks to the Real Estate Settlement Procedures Act (RESPA) regulations that went into effect last year, lenders are now required to provide borrowers a new, standardized, three-page good faith estimate (GFE) form that more accurately details what you'll have to pay in closing costs. Lenders are also required to provide the GFE within three business days of the borrower applying for a loan.

This means borrowers are now protected from any closing cost surprises. Lenders are now held accountable for fees disclosed to the borrower and are fined if final closing costs vary more than 10 percent from what the original GFE estimated.

Because the GFE is binding, you may be provided Initial Fee Worksheets or Loan Scenarios prior to deciding to lock in your mortgage.  When you are ready to commit, it's important to take a close look at the GFE and make sure the costs noted in the Initial Fee Worksheets and Loan Scenarios match up.

When reviewing your GFE, take note that fees are broken into three categories:

Category 1: Origination Charges - the charges that cannot increase at settlement

• Loan Origination fee
• Any points that are being paid or credited to raise or lower the mortgage interest (after you lock in your interest rate)
• Your adjusted origination charges (after your rate is locked)
• Transfer taxes

Category 2: The total of these charges may increase up to 10 percent at settlement

• Appraisal fee
• Flood certificate fee
• Mortgage insurance premium (for those loans which have upfront mortgage insurance)
• Title services and lender's title insurance (if Country Home Lending Source mortgage specialist select s them or you use companies identified by your Country Home Lending Source specialist)
• Government recording charges

Category 3: Settlement charges - third party charges that may change at settlement

• Initial deposit for your escrow account
• Daily interest charges up to when the mortgage payments start covering interest
• Homeowners insurance

The two, main purposes of the RESPA is to supply consumers with more information so they're better shoppers for settlement services and  to eliminate kickbacks and referral fees that unnecessarily increase the costs of certain settlement services. Ensure you're protected; discuss the RESPA regulations and/or the GFE with your Country Home Lending Source mortgage professional.

Keeping You Informed

Country Home Lending Source mortgage professionals are dedicated to keeping you informed of the latest market trends and mortgage options. Visit Country Home Lending Source online at http://homeloansokc.com, or call us today at 405-360-1995, to obtain custom loan options designed to fit your needs and help you obtain your home goals.