How close to good faith estimate will my home loan be?
Home Mortgage
Annie asked:
I’m just about to sign on my first home loan but want to know how close to good faith estimate will my loan be? I don’t want to pay much more than what I was quoted. The loan agent at the mortgage company (referred by builder) has told me that the good faith estimate is a breakdown of what I can expect but he estimates it will be a bit lower. I don’t want to lose my earnest money and money for upgrades if at closing it looks wrong.
Martha
I’m just about to sign on my first home loan but want to know how close to good faith estimate will my loan be? I don’t want to pay much more than what I was quoted. The loan agent at the mortgage company (referred by builder) has told me that the good faith estimate is a breakdown of what I can expect but he estimates it will be a bit lower. I don’t want to lose my earnest money and money for upgrades if at closing it looks wrong.
Martha
March 7th, 2009 at 9:42 am
Beatrice
If they can not tell you what your closing costs or payment is going to be do not sign.
If you are not getting a FHA first time home buyer rate of 5.25% no closing costs and 105% LTV loan, you are getting screwed.
Buiders refer to make money.
There should be a similar program in your State.
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These programs will not let them create all those fees at closing and require much less down But, there isn’t anything in there to kick back to the builder
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The Texas First Time Homebuyer Program provides below market interest rate mortgage loans through a network of participating lenders to eligible families and individuals who are purchasing their first home or who have not owned a home in the past three years. Two types of loans are available under this program. An “Unassisted Rate” loan typically offers our lowest interest rate available and does not provide funds for down payment and closing cost assistance. For borrowers needing assistance with their down payment, an “Assisted Rate” loan is offered to income-eligible borrowers that provides grant funds up to 5% of the mortgage amount. These loans are offered at a slightly higher interest rate.
We also offer a Mortgage Credit Certificate program that increases a family’s disposable income by reducing its federal income tax obligation. The tax credit is valid for the life of the loan as long as the borrower occupies the property as their primary residence.
March 8th, 2009 at 5:50 pm
Beth
It should be pretty close. However there are variables that can change it - for instance closing on a different day of the month skews what is due for taxes and insurance - often by several hundred dollars. However, it should be within $150-$400.
March 10th, 2009 at 1:48 am
Chester
It should be close, however, lenders are only required to disclose an estimate of the closing, exact figures may vary at closing. Example is the title company has its own fees, the county or state may have there own fees also, if there is a homeowners association that may also have fees that according to REPSA, the lender is not required to be exact on because there fees have nothing to do with the cost that the lender is charging. The good faith should however closely cover the rate and the points, very, very close. Below is a website that covers your right under RESPA
March 10th, 2009 at 1:55 pm
Eva
Those estimates are pretty close, within under 1%. Now if you get to closing and the builder tells you the upgrades cost more than you thought, tell him no, you won’t close unless he delivers the costs you discussed.
March 11th, 2009 at 12:22 am
Lucy
I can’t think of any situation where it would good for a person to borrow 105% of the value of a house on their personal home, however I don’t think anyone should tell you what loan program that would be best for you without first setting down and talking with you about your situation.
The gfe has to guess at your cost for homeowners insurance and never includes any costs for a home inspection (you may not be getting a home inspection on a new home but a lot of people do).
Once you talk to your insurance agent and decide what your deductable will be and the other features you want, then you can plug that in and get a better guess.
The loan agent suggested by the builder should be able to estimate everything else very closely since they probably work with the same title company and builder a lot.
March 12th, 2009 at 6:04 pm
Denise
IGNORE packinrat listen to Glenn and I forgot the other 2 posters right now.
Enjoy your new home!!
This is such a general statement as to be useless but take the loan amount and see if the closing cost are in a range of 2-3% of the loan. If it is a lot higher then take the contract to a real estate Lawyer for viewing.
March 15th, 2009 at 11:36 am
Wayne
You will get the exact figures at the closing table and you will have the opportunity to withdraw at that point. You can stop the sale at anytime before then. Make sure YOUR loan agent is there with you to explain all the figures. The title company will do this, but you need to make sure everything is good for you.
March 16th, 2009 at 7:14 pm
Leslie
At my last closing, the actual closing costs were $11 more than the GFE. Good lenders can really nail this.
Internet lenders seem to have a bait and switch game going on GFE’s. I have heard of a number of people walking away from the closing table because their internet lender was WAY off in the GFE.
Hopefully your builder referred you to someone reputable and knowledgable. Since your builder’s reputation is on the line also, I’m sure your lender is sharp.
March 17th, 2009 at 1:47 pm
Luis
1. If you want to make comparisons using very accurate data, get quotes from different lenders or brokers on the same day. Mortgage quotes change daily. At times, they even change several times in one day.
2. When you compare terms, compare mortgage quotes for similar lock periods. A lock period is the specific span of time that guarantees implementation of a certain rate. As a rule of thumb, longer lock periods have higher rates. Lock periods are generally offered in increments, like 15, 30, or 60 days.
3. Compare mortgage quotes that have the same points, such as zero or one. In the mortgage business, a point is the term given to a rate. Three points, for example, means three percent. Mortgage quotes follow a tiered pricing. This gives you the opportunity to buy the rate and bring it up or down. How? It’s very simple. To make the points decrease, increase the mortgage rate. To make the points increase, reduce the rate.
4. In the quote you ask for, ask that the quote loan be separated from associates fees. Property taxes, home insurance, and pre-paid interest are not lender’s fees. What falls under lender’s fees are the following: standard title, appraisal fees, and processing or underwriting charges.
5. Compare mortgage quotes of the same type. There are many types of mortgages. There is a buy-to-let mortgage. Then, there are also self-build mortgage, right-to-buy mortgage, and reverse mortgage. The terms of your mortgage could change along with the type.