FREE GFE REVIEW

Since January 1, 2010 all residential mortgage lenders are required to use the new Department of Housing and Urban Development created Good Faith Estimate of Closing Costs. The new form and the rules surrounding its use provide a few benefits:

• Uniformity in the way lenders are required to present information.
• Specific dates and time-frames regarding validity of the costs and rate quotes.
• Tolerances on the percentage by which some costs may increase.
• The requirement for the lender to pay the difference if tolerances are exceeded.
• Details regarding terms and conditions such as future changes in the rate, prepayment
• penalties, balloon payment .
• A trade-off table to illustrate alternative rate and cost options.
• A Grid to be used as a shopping chart.
• Better explanations and instructions for the consumer.

The new three page form established some degree of uniformity in the way information is presented, it provides more information, and it limits a lender’s ability to change costs at will. However, the form does not make it significantly easier for consumers to understand the bottom line impact to their wallet. It does not show the total payment including taxes and insurance, and it does not show the total cash needed to close, which are the two items with which borrowers are most concerned.

Our advisors are willing to objectively review any Good Faith Estimate you receive. Click on our <chat line>, send your GFE to gfereview@secondopinionma.com or contact us via phone or fax for advice and assistance.