Question:

Why read good faith estimate of closing costs?

Answer:

The good faith estimate of closing costs has to be provided by the lender before you choose a loan. Sometimes borrowers will head for the lowest rate and ignore closing costs. The good faith estimate of closing costs will help you compare quotes on similar mortgage loans to elect the best offer.

How to read the good faith estimate of closing costs?

Collect and compare GFEs on the same mortgage product. Compare items line by line, paying special attention on loan origination and broker fee.

Do not count on lender provided costs on third party services. Instead of relying on good faith estimate of closing costs for title and insurance companies and home appraisers, you'd better call those people.

Sometimes a lender will deliberately leave out items to make the loan closing costs more appealing. Make sure you ask the lender about items missing from the good faith estimate closing costs if you do not understand why.

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