Home Buying in 90638>Question Details

Che, Home Buyer in La Mirada, CA

In your experience, how much different is the Good Faith Estimate to the actual cost during closing?

Asked by Che, La Mirada, CA Tue May 13, 2008

How much more or less? What can you do if it is more than what was given to you as GFE during the initial negotiations?

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Good faith estimates are given by the lender and are just that, an estimate. Certainly the lender knows his/her own costs, but may not know the costs of the title and escow company. Because of this, a GFE is only a close guideline for your normal closing costs. In regard to the interest rate, which is also on the GFE, it too, is only an estimate. Interest rates fluctuate, sometimes hourly. The only way that a lender can assure you of an exact rate is to "lock" the rate. That way you are guaranteed the rate that you "lock"in. Most GFE, however, are +/- 1/4% from the original.
1 vote Thank Flag Link Tue May 13, 2008
Just becasue you are receiving an estimate for your closing costs, this should not be a reason for a sustantial change at time of closing. In fact, this is why there is new laws in place. There is however a law that states, if the fees vary more or less than .125% than your original GFE, this needs to be redisclosed through a Change of Circumstance form, and a waiting period will be enforced. I always recommend you keep your original GFE and compare to your final GFE, to find out why and where the discrepency is.
1 vote Thank Flag Link Wed Sep 12, 2012
I always go with my clients when they sign loan documents. The GFE is just that and the numbers can and most likely will change. If you have your agent with you they can help. I always look over all documents from the start of a transaction to the end!. Watch out for the buy down rates and the loan origination fees. Title fees should be checked also. Make sure you have a relationship with your lender and that they have your best interest in mind, not just a BIG paycheck for themselves. If you need any help just callme!
Deann McClung
Elite Signature Partners Team
Keller Williams AV
661-225-7146
1 vote Thank Flag Link Tue Jun 3, 2008
A good faith estimate is just that: an estimate. They are figured out with the best information available at the time the estimate is prepared. Other information may come up during the final steps that may raise the actual closing costs. If you do not want to pay these costs, you can always back out of the deal... however, you may not be able to re-coup your earnest monies. If you have an agent, talk to them; they should be the ones helping you figure this out.
1 vote Thank Flag Link Tue May 13, 2008
As my fellow agents have shared with you, GFE is just that. An estimate. I remember when I bought my first condo in 1990. There was a HUGE difference from the GFE vs when I bought my house in 2001. As the years have arrived so have new laws and regulations with regard to how a lender presents a GFE. Today, there is a new law that has been in play for a few months where the lenders have to disclose their fees and they have to be pretty close to what they quoted in the beginning. Now this is just for the lending side. But the lending costs are the ones that change and have in years past. When you first get a GFE from a lender at the beginning of the transaction or when you began looking, if there is a change of 1/8 point difference in the rate, that lender has to redisclose to you his new fees/costs. And then there is a waiting period of 3 days. I believe. I am actually going thru that now with one of my clients because rates have dropped significantly in the last few dates. And we are ready to close.
0 votes Thank Flag Link Thu May 20, 2010
It is an estimate, however the numbers should be fairly close. Just make sure the loan officer is putting on the pre paid taxes and insurance. Technically they are not closing costs but they will show up on the hud1.
Web Reference: http://getprequalified.com
0 votes Thank Flag Link Mon Jun 2, 2008
Che,
The numbers in the GFE is just that - estimate. You can however determine the closest amount the actual closing cost by determining the # of days prepaid interest and your insurance premium and your taxes. For taxes, depending on when you are closing, escrow may require you to pay the taxes up front for the coming due date because if you are impounding, there will not be enough money to pay it when it comes due.

Discuss with your loan processor or escrow officer to give you a more accurate quote.

Good luck - Charita King 562-276-8681
0 votes Thank Flag Link Mon Jun 2, 2008
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