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.
Our advice: Be sure to ask your lender about FHA loans. FHA loans have very competitive interest rates because the loans are insured by the US Federal Government. Even if you have had serious credit problems, such as bankruptcy, it is easier to qualify for an FHA loan than a conventional loan. Also, taking an FIXED rate loan while the interest rates are still low is a smart idea. Check your eligibility here:
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Common misspellings: mortage and morgage