Free Good Faith Estimate Form in PDF

Instructions on Writing Good Faith Estimate

Filling out a Good Faith Estimate (GFE) form is crucial for understanding your potential settlement charges and loan terms. This document estimates the costs involved if your loan application is approved. Here are the steps to complete the form correctly.

1. Start with the basic information at the top of the form. Fill in the Name of Originator, their Address, Phone Number, and Email.
2. Enter your information as the Borrower and the Property Address related to the loan.
3. Record the Date of GFE you were given this estimate.
4. Review the section titled Purpose to understand what the GFE provides in terms of loan estimates and settlement charges.
5. Under Important dates, note that the interest rate and other costs may change. Ensure you’re aware of the period you have to lock in your interest rate and the requirement to settle within a certain timeframe afterward.
6. Move to the Summary of your loan section. Fill in your initial loan amount, term, interest rate, and monthly amount owed for principal, interest, and any applicable mortgage insurance.
7. For questions about the interest rate, loan balance, and monthly payments potentially rising, check the corresponding boxes based on the terms offered.
8. Answer whether your loan includes a prepayment penalty or a balloon payment, and fill in the respective amounts or periods if applicable.
9. In the Escrow account information section, indicate if an escrow account is required by checking the appropriate box. If yes, note whether it covers all property-related charges.
10. The Summary of your settlement charges needs careful attention. Add your adjusted origination charges and charges for all other settlement services. This helps estimate the total settlement charges.
11. Review the Your Adjusted Origination Charges and Your Charges for All Other Settlement Services sections on page 2. Complete the details required about charges for services necessary for the loan and settlement process.
12. Finally, understand which charges can change at settlement. This will guide you on potential variances between your GFE and the actual costs listed on the HUD-1 form you'll receive at settlement.

Completing your GFE with accuracy ensures you are well-informed about the financial aspects of your loan and the settlement process. Keep this document handy for reference as you move forward with your loan and compare it with other offers to make the best choice.

What is a Good Faith Estimate (GFE)?

A Good Faith Estimate (GFE) is a document that provides you with an estimate of your loan's settlement charges and terms before finalizing the loan. Originated by the lender, this document aims to give borrowers a clear view of the charges they may incur upon loan approval, facilitating comparisons between different loan offers.

Who provides the Good Faith Estimate?

The GFE is provided by the loan originator or lender. It's their responsibility to outline the expected costs associated with your loan, including lender and third-party charges, to help you understand potential expenses before you agree to the loan terms.

What information is included in a Good Faith Estimate?

The GFE includes detailed information such as the loan originator’s name and contact details, property address, loan term, interest rate, monthly payment expectation, and information about whether these rates or payments can increase. It also breaks down your settlement charges into adjusted origination charges and charges for all other settlement services.

How can I use the GFE to compare loan offers?

The GFE is designed to be a tool for comparison. It includes a built-in shopping chart that allows you to directly compare the terms and costs of this loan offer with others. By evaluating different GFEs side by side, you can shop for the best loan that suits your financial situation.

Can the charges on the GFE change?

Yes, some charges on the GFE can change by the time you reach settlement. The GFE outlines which charges can increase, by how much they're allowed to increase, and which charges cannot change, providing a framework to understand potential variations.

Why might the initial loan amount and interest rate on the GFE change?

The initial loan amount and interest rate provided in the GFE might change due to fluctuations in the market or changes in your financial situation prior to locking in the rate. The GFE specifies a period during which the interest rate offer is valid, and conditions under which certain charges may adjust.

What happens if I decide to proceed with the loan?

If you decide to move forward with the loan, you should contact the originator as instructed in the GFE. From there, you'll work towards locking in an interest rate and moving forward with the loan application process, leading up to settlement and closing.

What is a HUD-1 Settlement Statement?

The HUD-1 Settlement Statement is a document you'll receive at closing that lists all actual charges and adjustments for the loan and property transfer. You should compare the HUD-1 to your GFE to ensure the charges align and understand any variations.

Are there any charges on the GFE that cannot increase by settlement?

Yes, there are specific charges listed on the GFE that cannot increase by the time of settlement. These include the lender's origination charge and the credit or charge (points) for the chosen specific interest rate after you lock in your rate.

What should I do if I have questions about my GFE?

If you have questions or something is not clear about your GFE, it is important to reach out to the loan originator or lender immediately. They are responsible for providing you with explanations and clarifications to ensure you fully understand the terms and charges outlined in your GFE.

Filling out a Good Faith Estimate (GFE) form can be a challenging task for many individuals. One common mistake is not comparing loan offers. The GFE provides a structured way to compare different loan terms and settlement charges from various lenders. By overlooking the opportunity to use the shopping chart provided on page 3, individuals may miss out on choosing the best loan for their needs.

Overlooking important dates specified in the GFE is another mistake. The form outlines critical timelines, such as how long the interest rate is available and when one needs to lock in the interest rate. Ignoring these dates can lead to unexpected changes in loan terms or additional costs.

A third mistake involves inaccuracies in providing personal and property information. Ensuring that the borrower's name, property address, and contact details are correctly entered is crucial. Errors in this information can cause delays or issues in the loan approval process.

Many borrowers also fail to review the loan terms thoroughly. The GFE details key loan terms, including whether the interest rate or loan balance can rise and if there are any prepayment penalties or balloon payments. Not understanding these terms fully can lead to unpleasant surprises down the road.

Another common error is misunderstanding or not asking about adjustable charges. The GFE explains which charges can change at settlement. People often overlook this part, leading to a lack of proper budgeting for the final settlement charges, which can be significantly different from the initial estimate.

Last but not least, individuals frequently neglect to inquire about incomplete sections of the GFE. For example, the tradeoff table and the shopping chart are optional for loan originators to complete. If these sections are left blank, it is beneficial for the borrower to request this information to make more informed decisions.

When navigating the mortgage process, the Good Faith Estimate (GFE) form plays a crucial role in providing borrowers with an estimated breakdown of their loan costs and settlement charges. Besides the GFE, there are several other essential documents and forms that are typically involved in the loan process. These documents work in tandem with the GFE to ensure borrowers are fully informed and prepared for the financial aspects of securing a mortgage. Understanding these documents is vital for anyone entering into a mortgage agreement.

• Loan Estimate Form: This document replaces the GFE for most types of loans due to changes in federal regulations. It provides a detailed breakdown of the estimated costs associated with your loan, including the interest rate, monthly payments, and total closing costs. It's designed to give borrowers a clearer picture of the financial commitment they are about to undertake.
• Closing Disclosure Form: This document is provided to borrowers at least three business days before closing on a mortgage. It itemizes the final costs of the mortgage, including the loan terms, projected monthly payments, and all fees and other costs associated with the loan. This form allows borrowers to compare the final terms and costs against the estimates provided in the Loan Estimate or GFE.
• HUD-1 Settlement Statement: Although largely replaced by the Closing Disclosure for most residential loan types, the HUD-1 is still in use for reverse mortgages and other transactions not covered by the TILA-RESPA Integrated Disclosure (TRID) rules. It provides a comprehensive list of all charges and credits to the buyer and seller in a transaction. For those loans where it is still in use, it serves an important purpose in detailing the final financial transaction details.
• Truth in Lending Act (TILA) Disclosure: This document outlines the cost of your loan and the terms of your mortgage, including the annual percentage rate (APR), term of the loan, and the total amount you will pay over the life of the loan if you make all payments as scheduled. It’s designed to help borrowers understand the true cost of their mortgage beyond just the interest rate and monthly payments.

Together, these documents provide a comprehensive overview of the financial responsibilities and rights of borrowers entering into a mortgage agreement. They are designed to ensure that borrowers are making informed decisions based on clear, understandable, and accurate information. Each plays a specific role in the mortgage process, providing clarity and protection for both borrowers and lenders. Understanding these forms and documents, along with their relationship to the GFE, equips borrowers to navigate the mortgage process more effectively.

The Loan Estimate is remarkably similar to the Good Faith Estimate (GFE), offering an overview of loan terms, projected payments, and closing costs associated with a mortgage. Both documents are designed to give borrowers a clear understanding of their financial commitments before proceeding with the loan. A Loan Estimate, however, is a more current form that replaced the GFE and the initial Truth in Lending disclosure as part of the TILA-RESPA Integrated Disclosure rule in 2015.

The Closing Disclosure closely aligns with the GFE in that it itemizes the final costs associated with a mortgage loan. This document is provided to the borrower at least three business days before loan closing. It serves a similar purpose in ensuring transparency of all costs incurred by the borrower, but differs in its timing and specificity, offering exact rather than estimated charges.

The HUD-1 Settlement Statement is another document that bears resemblance to the GFE, particularly in its detailed listing of all costs tied to the mortgage transaction. The HUD-1 was typically used in transactions not covered by the TILA-RESPA Integrated Disclosure rule, primarily reverse mortgages. Similar to the GFE, the HUD-1 provided a breakdown of charges but was given to the borrower at closing, not upfront.

An Annual Percentage Rate (APR) Disclosure complemented the GFE by informing the borrower of the true cost of borrowing, including interest, points, fees, and other charges, presented as a yearly rate. This document parallels the GFE's intention to disclose the comprehensive costs of the loan, allowing borrowers to make an informed decision.

The Truth-in-Lending (TIL) Disclosure, similar to the GFE, offered an initial summary of the terms of a mortgage, including the APR, finance charge, amount financed, and total of payments. The TIL’s main objective was to ensure borrowers understood the credit terms and costs, echoing the GFE's aim to promote transparency and comprehension among consumers.

The Initial Escrow Statement, akin to the GFE, provides details on the escrow account that will be established at closing, including the estimated taxes, insurance premiums, and other charges to be paid over the first year. Both documents aim to give a comprehensive view of upcoming financial obligations associated with the mortgage.

A Mortgage Servicing Disclosure Statement, while not estimating costs like the GFE, informs borrowers about whether their loan may be serviced by a different company than the lender. This document shares the GFE's goal of upfront transparency regarding aspects that could affect the borrower's loan experience.

Lastly, the Prepayment Penalty Disclosure, which may be part of loan documentation in scenarios where a penalty applies to early loan payoff, can also be reflected within the GFE. This emphasizes the GFE's purpose to disclose all potential costs and penalties associated with the mortgage, ensuring borrowers are fully informed of their obligations and rights.

When filling out the Good Faith Estimate (GFE) form, certain practices can contribute to a smoother, more transparent lending process. Here are things you should and should not do:

Things You Should Do:

1. Review the form carefully: Ensure all personal information, including your name, address, and the property address, is accurate to prevent future discrepancies.
2. Understand loan terms: Pay special attention to your loan’s terms, such as the interest rate, monthly payments, and whether these can change over time. It's crucial for budgeting and preventing unexpected expenses.
3. Compare loan offers: Use the shopping chart provided on page 3 of the GFE to compare different loan offers. This empowers you to make an informed decision by highlighting differences in costs and terms.
4. Check for changes in settlement charges: Be aware that certain charges can change at settlement. Understanding which charges these are and how they can influence your total costs is key.

Things You Shouldn't Do:

1. Overlook the ‘Important dates’ section: Failing to note the validity period of the offered interest rate or the deadlines for locking in the interest rate can lead to missed opportunities and increased costs.
2. Ignore the tradeoff table: Skipping this part means missing out on a tool that can help you decide between lower upfront costs with a higher interest rate, or higher upfront costs with a lower interest rate.
3. Assume all charges are final: Some fees can change, especially if you decide to use providers not recommended by the loan originator. Always ask which services you can shop for to potentially lower these costs.
4. Neglect to ask about future loan sale: If your loan is likely to be sold, understanding how this can affect you, both in terms of loan servicing and any future fees, is crucial for long-term financial planning.

There are several misconceptions about the Good Faith Estimate (GFE) form that both borrowers and sometimes lenders might have. Understanding these misconceptions can help borrowers navigate their loan process more efficiently. Here are four common misunderstandings:

• Permanence of the GFE's terms: Many people believe that the terms and costs detailed in the GFE are final and cannot change. However, certain conditions such as not locking in an interest rate can lead to adjustments in some of the costs or terms provided on the GFE.
• Good Faith Estimate equals approval: Another common misconception is that receiving a GFE guarantees loan approval. The GFE is merely an estimate of settlement charges and loan terms based on preliminary information. Final approval depends on further review of the borrower's financial situation and property appraisal.
• Shopping with the GFE is unnecessary: Some borrowers think that once they receive a GFE from one lender, there is no need to shop around. This is incorrect. The GFE is designed to help borrowers compare offers from different lenders to find the best loan for their needs.
• GFE is only about fees and charges: While it's true that the GFE provides an estimate of the settlement charges, it also contains critical information about the loan terms, including the interest rate, loan balance, monthly payments, whether these can rise, and if there are any prepayment penalties or balloon payments. Misunderstanding this aspect can lead to overlooking important details about how the loan operates beyond just the fees.

By understanding these misconceptions, borrowers can make more informed decisions when reviewing their GFEs and choosing the right loan product for their requirements.

• Understand the purpose of the Good Faith Estimate (GFE). The GFE provides an estimate of your settlement charges and loan terms if you are approved for a loan. It's a tool for comparison shopping, allowing you to compare this loan offer with others to find the best deal for you.
• Pay attention to important dates. The interest rate offered in the GFE is only guaranteed until a specified date. After this date, the interest rate, some loan Origination Charges, and the monthly payment can change until you lock your interest rate. There are also specific deadlines for locking in your interest rate and going to settlement to receive that rate.
• Review the summary of your loan carefully. The GFE outlines key details of your loan, such as the loan term, initial interest rate, and whether your payment can increase over time. It will also indicate whether there's a prepayment penalty or a balloon payment involved in your loan.
• Know which charges can change at settlement. Not all charges listed in the GFE are set in stone. Some charges can increase by up to 10% at settlement, while others might not change. The GFE should also be compared with the HUD-1 form you receive at settlement to ensure charges are consistent or within the allowed variance.