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I'm Robert Mangino with Mike Henry, Vice President of Dollar Bank Residential Lending,
and we're here to talk about good faith estimates for mortgages. Mike, what is a good faith estimate?
Well, the good faith estimate is a document or a disclosure
that the lender provides you to show all the costs associated with either buying the house or refinancing.
It's typically divided into several segments. There's what the lender charges for the loan,
the title fees associated with the loan which would be the title company that closes your loan,
and then government taxes, recording fees, things of that nature, those are the three different categories that are typically part of a good faith estimate.
What's the purpose of a good faith estimate?
Well, it allows you to shop accurately for a mortgage.
Your lenders are required to give you
a good faith estimate without having you apply or paying any fees. In fact, in the last
several years there's been quite a few changes to the good faith estimate.
And tell us what these changes are.
Well, the changes are that the lender is
liable for the fees that are shown to a certain percentage on each fee.
So they can't do things like pad fees or make up fees and then
make it look lower when you go to close, or the opposite, underquote you and then the fees go higher.
So the lender is on the hook for many of the fees,
anywhere from a 0% tolerance to a 10% tolerance.
Thank you, Mike. For more information, contact a Dollar Bank mortgage expert at
1-800-344-LOAN or visit dollarbank.com.