An experienced local mortgage broker/banker, such as Premiere Mortgage, can assist you in every aspect of your home purchase. One such aspect is understanding the good faith estimate.
As required by the Real Estate Settlement Procedures Act (RESPA), a mortgage lender or broker must provide a good faith estimate to a customer. The estimate must include an itemized list of fees and costs associated with your loan.
While different loan processing software can have a slightly different looking format, all good faith estimates have to meet the same legal standard. Each charge has a number assigned to it on the form. A good faith estimate allows you to compare different quotes from various lenders or brokers.
These costs are referred to as settlement or closing costs and are intended to cover every expense linked to the purchase of a home. This includes title insurance, inspections, taxes and other fees. It is important to remember that your final closing costs may be different because the good faith estimate is an estimate based on everything known at the time the estimate was given.
In the good faith estimate, one of the most important segments can be found in the section with the 800 numbers next to the entry lines. This section covers things such as origination charge (801), points (802), appraisal (803), etc. These are fees that the lender charges.
Other charges which must be listed, such as escrow recording fees, title insurance, and attorney fees, are not in the lender’s control and can be listed at a rate that is lower than what might be charged by that service or vendor. This can create a total “bottom line” of charges and fees that may not turn out to be fully accurate.
Different lenders charge different fees. Your mortgage broker can help you understand those fees and work on your behalf to find a lender with the best deal for you, or negotiate the fees on your behalf.
Premiere Mortgage has offices on Maui and Kaua‘i and provides a wide range of services to the real estate community. Tricia Morris may be reached on Maui, in Kihei, at 874-8800, Wailea, at 891-8900, West Maui at 665-8800, on Kaua‘i at (808) 822-2300, or toll-free at (800) 813-7711.