Super Contributor
Posts: 8,371
Registered: ‎09-28-2007
Re: Good Faith Estimates Explained
In the lower left corner is the breakdown of the Total Estimated Funds Needed to Close. It’ll include the purchase price (purchase)/payoff (refinance), the new loan amount, estimated closing costs, estimated prepaid items/reserves, any settlement costs being paid for by the seller (or another party, such as the real estate agent, mortgage broker or mortgage lender), and any cash deposit you’ve put down (in the case of a purchase transaction), new 2nd mortgage (subordinate financing), new 2nd mortgage closing costs, and at the very bottom of that section will be the estimated amount of funds you will need to bring in to close on the transaction or in some situations (such as a refinance) will be the estimated amount of cash back to you at closing.

In the lower right corner is the breakdown of your Total Estimated Monthly Payment. It’ll include the principal & interest (P&I) payment on the 1st mortgage, P&I payment on any other mortgage on the property (other financing), hazard/homeowners insurance, property taxes, mortgage insurance, and homeowners association fees. Even if you choose not to establish an escrow account to pay your property taxes/homeowners insurance from, and even though you never pay your homeowners association fees with the mortgage payment, they will still be listed just for reference.

Even though a lot was covered in the above information, there are still transaction specific questions that you might have pertaining to charges seen on a GFE. Feel free to create your own thread (or find another thread which contains a similar question) to ask follow up questions.

You are always welcomed to post a GFE you have received in a new thread and ask the participating mortgage mortgage professionals here to comment on if it’s a good offer for your situation or not. When posting a GFE, in addition to the actual GFE itself (you do not need to post a picture of it unless you are able to, you can just copy & paste line items into a new thread), please provide any helpful information which would help others determine if it’s a good match to your situation. That “helpful information” could include, but is not limited to, the type of mortgage (30-year fixed, 5-year ARM, VA, FHA, etc.), your credit scores and what is on credit, your income & your monthly payments (to determine your debt to income ratio), and any reserves/assets (savings/checking, 401k, IRA, stocks, bonds, CD’s, mutual funds, etc.) which can be used as a compensating factor for areas within your “borrowing profile” which are lacking (such as a high debt ratio could be offset by having a lot of reserves).