Posted on September 21, 2015
Some More Good Faith Estimates
8 – Government Recording Fees – Your loan documents have to be recorded. There’s a standard rate for recording fees and this should fee should not vary.
Check both of your good faith estimates to make sure these costs are the same. All recording fees are standard – the courthouse charges the same amount for everyone. You can either go online or call your local courthouse, county clerk, or recorder (the offices where you record documents are different in every state and county) and ask them how much it is to record a deed.
9 – Transfer tax fees. Some states have a transfer tax. This fee is set by the county or a providence. It should not vary. Make sure both of these charges are the same on your good faith estimates and if you don’t live in a state that has transfer tax fees, there shouldn’t be an amount here.
10 – If you’re going to have an escrow account – an account where you lender takes some money from your monthly mortgage payment to pay for property taxes, insurance, property owner or homeowner association fees, you’ll see those figures here. Refer to Chapter 2: Escrow Accounts.
11 – Daily interest charges. You’ll have to pay a daily interest charge. Let’s say you are closing on your house on the 15th day of the month. You’ll pay daily interest from the 15th day of the month through the last day of the month. This amount should be the same on both good faith estimates.
12 – Homeowners Insurance. Shop around for homeowner insurance. Call the insurance company that has your automobile insurance and ask for a quote, if you want further information you can see this website here. Most insurance companies give discounts for having an auto and homeowner insurance policy. Remember, sometimes the cheapest insurance isn’t exactly the best insurance. Talk to your insurance agent and learn about the types of coverage.
TIP: You can lower the cost of your insurance by increasing the amount of your deductible. But be careful, if you choose a $5,000 deductible and something happens to your house – a robbery, fire, a hazard – you’ll have to come out of pocket $5,000 before your insurance company pays for the loss.
13 – Total costs on page two of your good faith estimate.
14- Total cost on page one and two of your good faith estimate. This is an estimate of what it’s going to cost you to get your loan.
Note: Good Faith Estimates are just that – estimates in good faith. Don’t be surprised if your total settlement cost (the cost to get your loan) is not the same when you close on your house, but the total cost should not change significantly.
Page three of the good faith estimate is instructions. They are self-explanatory. If you have any questions, contact the lenders and ask for an explanation.
Now, take the two good faith estimates you’ve received from mortgage companies and compare them. Choose the best one that fits your situation.
After you choose a lender, ask for a pre-qualification letter. This is a letter from the lender stating that you are pre-qualified for a loan and they’ll state the amount, i.e. $100,000 – $150,000.
You will want this pre-qualification letter you’re ready to make an offer on a property. When you make an offer on a property and include a copy of this pre-qualification letter, a seller will be relieved to know that you’ve already talked to a lender about financing. If the seller has multiple offers without pre-qualification letters, you’re going to be in a better position to have your offer accepted.
– You are familiar with all the items on a GFE.
– You know you can negotiate the costs on some of the items on the GFE.
– You know an approximate amount of how much it’s going to cost you to get a loan.
– You are going to compare both GFEs and make a decision on which lender is the best for you.
– You are going to get a pre-qualification letter from the lender.
Next, you’re going to make a wish list – a list of everything you want in your home.