If you’re shopping for a mortgage, you want to ask the potential lenders for a cost estimate or estimate worksheet. (It doesn’t matter what the exact title is at the top of the page.) This written estimate provides you with the figures you need to choose a good lender:
* Loan amount, interest rate, and monthly payment.
* Lender fees, including origination fee and discount fee, as applicable.
* Estimated third party costs, such as appraisal, credit report, tax service, and flood cert.
* Title and escrow settlement costs. (Your designated title company and escrow/attorney will determine these exact fees for their services.)
* Recording fee, charged by your local county recorder’s office.
In addition, the loan officer may include an estimate for property taxes, home owner’s (hazard) insurance, and estimated days from the closing to the end of the month (called prepaid interest).
This upfront cost estimate is more useful than the convoluted, new 3-page GFE created by the Feds who have never worked a day in the mortgage business. So don’t feel disappointed or put off.
The actual GFE will be given to you by the lender you have chosen after you provide the necessary documentation for your actual pre-approval. Per law, the lender must give you a GFE, TIL, and other disclosures within three business days of taking your full loan application, including your social security number for the credit check and financial documents.
Currently, a committee is designing a new GFE/TIL form, hopefully, to be completed in 2013. I’ll keep you posted as information becomes available. Please feel free to subscribe to this blog or check back periodically, as desired. As always, thank you for reading my posts.