Have Faith? Pearl River GFEs Do!
Pearl
River Good Faith
Estimate: It’s Part of the Deal
Understanding the GFE,
TIL
When you plan on getting a
mortgage in Pearl River anytime this winter, you’re fairly
certain to run into something known as the GFE. It’s the acronym for ‘Good
Faith Estimate’-- and despite the reassuring name, the federal government
decided they had better make it mandatory (to me, the opposite of having much
faith at all).
The GFE has a new format
dictated by the federal Real Estate Settlement Procedures Act which requires
lenders to provide an estimate of the charges and fees due at closing. Lenders
have three days to make it available.
The GFE looks like a bill.
It features a list of fees and charges denoted by three-digit codes. It is
grouped into sections to make it more readable, and although at first glance
the resulting grid looks overly complicated, after you scan through it once or
twice, it actually makes sense. The reason it is a good idea is because of the
number of charges that may or may not be on there. It prevents sudden
last-minute cash flow surprises at closing.
Once you receive your GFE,
you'll also receive a Truth in Lending (TIL) disclosure form. This gives you
the annual percentage rate for your mortgage, taking into account mortgage
insurance, discount points and other assorted fees.
The GFE is exactly what it
says - an estimate. This isn’t so that the lender can suddenly raise the
prices: there is a built-in variability to the various processes that truly
cannot be guaranteed until the last ‘i’ is dotted and the last ‘t’ crossed. The
figures quoted in a GFE can rise as much as 10 to 15 percent or more by
closing…they can also fall. The GFE comes in quite handy when you’re getting a Pearl
River mortgage because you can compare it with the final, see where any
differences appear, and be assured that it all makes sense. If getting a
mortgage meant waiting until closing to see what surprises appear, the moment
would be much less appealing.
Getting a mortgage is an integral part of
becoming a Pearl Rivel homeowner. Understanding the costs at
every step of the way is a big part of the decision-making process – it is just
one of the services every one of my clients can be sure I will provide.