Understanding a Good Faith Estimate

A Good Faith Estimate (GFE) is an important yet sometimes confusing mortgage document that potential homeowners and those refinancing their homes may encounter. A GFE could also be one of the most powerful negotiating tools for you to land the best deal on a mortgage loan. This document helps ensure borrowers end up with the same terms they were quoted at the closing table. In this blog I discuss what a Good Faith Estimate is and how you can use it.

A Good Faith Estimate is the estimated closing costs associated with taking out a mortgage loan to buy or refinance a home based on your personal information. Included in the GFE is a summary of your anticipated loan terms, an itemized list of all the various costs involved with financing, and how much money you will need to bring with you to closing. In the past, lenders provided potential borrowers with Good Faith Estimates, however, there have been many changes in the way these are used and provided to clients.

We will need some information from you so be prepared when you come in, call, or apply online to fill out a loan application. Here is a list of what we will need from you to give you a good faith estimate:

·       Your name

·       Your monthly income

·       Your social security number (to obtain a credit report)

·       The desired property address

·       Estimate value of the property

·       Loan amount

·       Other items necessary and relative to the loan

The Good Faith Estimate is provided to potential homeowners to help them avoid overpaying for a loan and sets forth the expected interest rate. Loan charges, third-party fees, and other costs associated with the loan must be displayed uniformly. In the past, lenders weren’t always uniform in their estimations of fees included on the Good Faith Estimate and how such fees should be disclosed. Sometimes sellers agree to pay all or some of the buyer's closing costs, but when they don’t a GFE comes in very handy to maintain the expected expense of purchasing a home.

At Intercoastal Mortgage Company we provide our clients with an accurate Good Faith Estimate and the most professional service a lender can provide. Contact meand begin the loan process to own your own home.

5 Tips to Prepare for a Home Loan

People often ask when the best time to buy a house is. The answer is: right now. Current mortgage rates are the lowest they’ve been in many years. Though it is not as easy to quality for a home loan now as it was several years ago, borrowers who are prepared and have the professional support of a quality lender, improve their position considerably. This blog discusses the best way to prepare for a mortgage loan, so when you are ready for home ownership, you have a better chance of successful funding.

These tips will help you prepare to obtain a mortgage:

·       Have an idea of how much you can afford - though this can change once you consult with your qualified loan officer, it helps to have a starting point. Start by completing a loan application form for us so a loan officer has their specific financial information and can run qualifying numbers

·       Know your credit scores - it is easy to obtain a credit report.  This will give you scores and show any areas of concern which you may need to address

·       Know what documentation you are going to need. Our application process at Intercoastal Mortgage Company is very easy and streamlined, your loan officer will tell you what you will need to produce as you move through to closing your loan. Examples of documentation would be copies of pay stubs, W-2 forms, and bank statements.

·       Have your documents ready when we need them - when you find the house you want, you don’t want your processing delayed while you search for documents.

·       A little education can go a long way - know the current interest rates, learn how closing costs, points, and different types of loans effect the terms. We help our clients put all of this in perspective to make the best choice for their individual situation.

Good credit is the key to obtaining a mortgage with favorable terms in this lending market. Get copies of your credit scores and credit history and study the reports carefully to make sure there are no errors or issues to resolve. Make sure you know your budget, and be prepared for unexpected expenses.  We will help you with any questions and assist you in this process for the best possible outcome. Contact me and you can begin the process of home ownership.