Good Faith Estimates (GFE)

The Real Estate Settlements Procedures Act (RESPA) is a federal statute originally passed in 1974.  The Act’s provisions govern companies involved in residential real estate closings and give certain rights to the consumer.  One provision of the Act requires lenders to provide mortgage applicants with a written Good Faith Estimate.

When you apply for a loan, the lender should provide you with a written Good Faith Estimate within 3 business days after receipt of your application. A Good Faith Estimate is a complete estimate of the closing costs involved in purchasing or refinancing your home.  The costs listed on the GFE typically include the lender's origination fee, points (if any), escrow or attorney's closing fees, title insurance, appraisal fee, and various other fees for taxes and miscellaneous expenses. 

The estimate is designed to give you the ability to shop and compare the fees of one loan to the fees of another, so that you can make informed decisions based on the total acquisition cost of the loan. Please note that the Good Faith Estimate is just that – an estimate. That means the costs can--and sometimes do--change from when your GFE is prepared until your transaction closes.