A Good Faith Estimate (GFE) is a form that lists basic information about the terms of a mortgage loan for which you’ve applied.

The GFE includes the estimated costs you’ll have to pay for the home loan. The Good Faith Estimate provides you with basic information about the loan, which will help you:

-Compare offers
-Understand the real cost of the loan
-Make an informed decision about your loan choice

The lender or the mortgage broker must provide you with a GFE within three business days of receiving your application or other required information. You can’t be charged any fees until you get the GFE and indicate that you plan to take out the home loan. But you can be charged a credit report fee.

If the lender denies your application within three business days, it does not have to provide you with a GFE. Within 30 days, your lender has to tell you:

Why your application was denied, or
That you have 60 days to request the reason why it was denied
Tip: You don’t have to take the mortgage loan even if you receive a GFE. The lender also doesn’t have to give you the loan even if it provides a GFE.

A good faith estimate, referred to as a GFE, must be provided by a mortgage lender or broker in the United States to a customer, as required by the Real Estate Settlement Procedures Act (RESPA).  The estimate must include an itemized list of fees and costs associated with the loan and must be provided within three business days of applying for a loan.

These mortgage fees, also called settlement costs or closing costs, cover every expense associated with a home loan, including inspections, title insurance, taxes and other charges.

Closing fees, also called settlement costs, cover almost every expense associated with your home loan. Because closing costs typically amount to between 3 percent and 5 percent of the sale price, it is best to wait until you receive the good faith estimate before committing to a loan. Smart shoppers obtain good faith estimates from two or more lenders, compare their costs and ask questions about any large discrepancies.

A good faith estimate is a standard form which is intended to be used to compare different offers (or quotes) from different lenders or brokers.

The good faith estimate is only an estimate. The final closing costs may be different; however the difference can only be 10% of the third party fees. Once a good faith estimate is issued the lender/broker cannot change the fees in the origination box.

When you apply for a home loan, a lender is required to provide what’s know as a mortgage good faith estimate, often abbreviated as GFE, to you within three days or less. This stipulation is set forth by the Real Estate Settlement Procedures Act, RESPA for short. The provision says that a lender must present a general summery of the costs and expenses that the borrower will have to deal with at the time he or she closes on a piece of property.

Is a Mortgage Good Faith Estimate Accurate?
Although the good faith estimate should be accurate, lenders aren’t necessarily legally bound to their GFEs. However, most lenders try to honor good faith estimates as closely as possible in order to avoid developing a bad reputation with customers. You can check out reviews of lenders through online consumer advocacy sites and other third party protection sources to make sure that you do business only with lenders that have good track records with their GFEs.

However, even with reputable lenders, the GFE may not be completely accurate after application due to closing costs, lawyers’ fees, investor charges, and other various costs that are not necessarily within the control of the lending institution. If a buyer and seller agree to use a particular attorney, for instance, and that attorney charges more than what the lender estimated, the final cost of the closing cost may be higher than the GFE — through no fault of the lender.

Lenders will generally let you know in writing if the original GFE is going to be substantially off. If you see that the final costs exceed 16 percent of the GFE, a red flag should go up. Scrutinize the contract, and ask your lawyer to go over any requirements that you don’t fully understand.

Remember that once you sign your contract with the lender, the act is legally binding, and it can be very difficult to get out of an unfair agreement.

The Good Faith Estimate is standardized. All lenders must provide consumers with the exact same document. Loan charges, third-party fees, and other costs must be displayed uniformly. Previously, lenders were not uniform in their interpretations of what fees should be included on the Good Faith Estimate and where such fees should be disclosed.

The GFE should cover closing costs and the amount of cash the borrower needs to close on the agreement. It should also detail which if any prepaid expenses must be handled and the average monthly payment the borrower will have to countenance to keep up with the loan. Therefore, the mortgage good faith estimate should give you a fairly good idea of what you will ultimately have to pay. more info at