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New Good Faith Estimate
January 11, 2010 by friscomortgageguy · Leave a Comment
| NEW GOOD FAITH ESTIMATE. CHANGE FOR THE BETTER?
The government decided that a one-page Good Faith Estimate (GFE) was not adequate for the home buyer. Consequently, they have done a Real Estate Settlement & Procedures Act (RESPA) reform changing the original act that became law in 1974. This reform was supposedly done to benefit consumers (for a longer explanation of RESPA click here The concern with the original GFE was that unethical loan officers and Mortgage Brokers were not completing the form properly. Leaving off known fees which the buyer in responsible for at closing. Anyone who has purchased a home knows that the GFE rarely matches the HUD-1 settlement. Mortgage Brokers are able to produce a GFE however they see fit. At the beginning of my career as a Mortgage Broker I created a template for each loan transaction – a beginning point, if you will. This template is only as good as the figures that are plugged into it. Figures for lender’s fees, legal fees, title fees, state fees, county fees, survey fee, insurance, etc. are always subject to change. For this reason I update my template quarterly which enables me to be as accurate as possible. I strive to make my GFE as close to the HUD-1 settlement as possible. Legally, I was not required to update the template until January 1 of 2010 when the RESPA reform took effect. The GFE you will now see is a binding contract between a Mortgage Broker and the client. In the old days (December, 2009!) an origination charge meant the fee paid to the Mortgage Broker for originating the loan. In January 2010 for the convenience of the consumer to shop the loan, several fees were bundled together. They are now broker originator fees, all lender fees and broker processing. Those new origination charges have zero tolerance and may not differ from the final HUD-1 settlement statement. For title fees and government recording charges, the creators of this bill recognized that there might be some variance in these fees and allowed a 10% difference at closing. If there is a change- the Mortgage Broker pays! To sum it up, this will be a most interesting first quarter. My prediction is that you will hear a great deal more about this both from the national and local media in the next few months as the first of these loans under the new RESPA reform begin to close. Questions? |
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Buyer! – What you need to know and probably will not say "
December 19, 2009 by iforyouz · Leave a Comment
Talk now more than ever for fraud are common guides and a main part of the conversation. Borrowers on terms more guides than ever formed: a fixed rate and floating rate, weapons, etc. But what strikes me is the lack of knowledge borrowers / buyers have regarding the good faith estimate and the fees associated with money loans are .
The Real Estate Settlement Procedures Act, or for short ReSPA was written by the U.S. Department of Housinginformation are filled and Urban Development (HUD) and to protect borrowers from hidden fees, bait and switch tactics, and the exceptional items which are charged to borrowers who knew nothing cheap, until the final table. To address this problem requires ReSPA the need for a debtor to a mediator guides / lender with a good faith Estimate (GFE) to the borrower not more than 3 days after the submission of loan application. This GFE is detailed to the borrower and explain theBorrower must sign and receive a copy.
The GFE includes things like the creation of commissions, underwriting fees, processing fees, deposits, estimated proration under estimated liabilities, etc. The GFE is a purchase price and interest rate. After the borrower receives an offer on a property and its agents accept / locks in a rate lender if the borrower's GFE with an updated version that reflects the purchase price and interest shall be made available. "The accuracy of these charges is a critical factorimportant, "says Jennifer Moran Foland, a real estate agent with RE / MAX Excellence, because it tells the buyer how much money they need to close the transaction and receive their new home. I can not say how many times my clients have after Review your estimated HUD-1 surprise from the company title coming to the closing table with more money than they had expected. "
For borrowers, the HUD-1 statement should reflect the numbers that were provided to the GFE available. TheLender fees should be identical, called the charges on the GFE, and the proration of taxes, sewer, Hoa, tax title should be in the vicinity. "It's important to be aware of this to buyers." Says Jennifer. "But I have a chance – take a copy of the GFE with my clients in advance so I know what my customers to get to the closing table and ensuring that there are no last minute surprises should."
As a final note ReSPA went on some recent reforms and newRegulations have been issued by the Department and will from 1 January 2010.
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Getting the most out of your lender
September 8, 2009 by Mortgage Align · Leave a Comment
There are many lenders offering great rates and outstanding customer service. Here are a few ways to make sure you receive the best deal with your new home loan:
Ask for a G.F.E. (Good Faith Estimate) – Always read all documents pertaining to the mortgage carefully. When you apply for the introductory special rate offer, read for all the hidden costs and conditions for early repayments. The Good Faith Estimate will detail the lender’s closing cost and all the fees associated with your home loan.
As far as possible take a short term refinance home loan, as it will help you get a loan at a lower rate for a short term than taking one out for a long term. It saves you more money on the whole.
Know your credit score. Your credit score is the big factor in determining your loan amount and the interest rate you can receive. Know this number before you talk to a loan officer and you’ll be able to get more information without them having to run your credit.
As per the law, all lenders have to explain all the costs and fees charged by them within a week of applying for a home loan. Be clear on all the surcharges and fees levied in all the forms pertaining to the home loan documentation.
Getting to know about different deals by different lenders is always helpful. Knowledge about them helps you bargain for the best deal.
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What Are The Closing Costs For A Home Loan?
October 9, 2008 by Mortgage Align · Leave a Comment
Typically, closing costs to buy a home run anywhere from 2 to 4 percent of the purchase price. Much depends on the points and origination fees a lender charges to make the loan. To see the fees a lender charges, ask your loan officer for a Good Faith Estimate (GFE). A GFE is a disclosure that contains a lender’s “best guess” estimate on all of the cost that will be associated with your particular loan. A lender must provide a GFE within 3 days of the loan application.
