Summary: Discusses “good faith estimates,” or GFEs, documents which include all the costs associated with your mortgage loan. GFEs are used to give you a sense of the true cost of your loan and to compare loan offers from different lenders. GFEs can be difficult to read. A mortgage broker can help you navigate GFEs and understand the full financial burden of your loan. If you’re looking for a loan in Seattle, WA, obtaining a mortgage broker to assist with reading your GFE is highly recommended. We encourage readers to contact Sammamish Mortgage to learn more and get in touch with a Seattle mortgage broker today.
When deciding to buy a home, several smaller decisions are involved at the same time. One of these decisions is “should I use a Seattle mortgage broker to help me determine the right loan for my purchase”? For many reasons, the answer to this question is usually yes.
Finding a mortgage broker in Seattle, WA will help you consider all the loan options available to you (not just the mortgage loan the lending institution wants you to take so they maximize their profit off your situation). A mortgage broker will look at your complete financial picture from the money you can put down to monthly mortgage payment range to purchase price and help you craft the best financial picture for your situation. A mortgage broker will guide you through the entire decision making process and ask questions you may not ask yourself to solidify a financial future that’s in your best interest, not the lenders.
What is a Good Faith Estimate?
As you begin the mortgage loan process the government, through the Federal Real Estate Settlement Procedures Act, requires lenders to give you a document that lays out all the costs associated with the mortgage. This document is called a “Good Faith Estimate” (GFE) and must be produced within three days of your loan application.
The GFE helps borrowers compare the real costs of their loans against competing for offers to determine the lender offering the best deal for their mortgage loan. Good Faith Estimate closing costs outline everything from the interest rate to insurance fees associated with your particular mortgage loan.
The reason many people enlist the help of a mortgage broker in Seattle, WA in this process is a GFE can be tricky to understand. Some lenders won’t list costs the same way or lump services in fees different than other lenders and this can lead to confusion for even the most seasoned real estate investor.
How to Analyze Good Faith Estimate Closing Costs
If you, or a Seattle mortgage broker, is looking at your GFE from a lender, there are variables you should inspect to get a complete picture of the costs of your loan.
- What’s the interest rate of the loan and are there any discount points?
- What are the fees for the discount points and when will you start seeing a return on the lower rate to offset those fees?
- What are the lender’s fees costs for things like the appraisal fee, the credit report fee, and interest lock-in fee?
- Does the escrow fee include a title search or title insurance fees?
- Are the fees locked in or might the lender be understating the fees only to rise them the day of closing?
- Most importantly what is your Adjusted Origination Fee vs. the interest rate quoted. The Adjusted Origination Fee shows the sum of all lender fees paid including origination and discount points.
A Mortgage Broker May Be Critical in the Seattle Area
Having a mortgage broker to help you accurately interpret the good faith estimates of lenders may be more important in some areas than others. This is because some areas have more localized costs and expenses which can add to the overall financial burden of the mortgage loan. And, if you don’t have a mortgage broker to help you, localized costs and expenses may not be properly taken into account. In addition to correctly reading your GFE to understand the offers from lenders, you should also have a clear sense of the full financial responsibility of your mortgage loan. And this sense will involve taking into account the localized costs of your surrounding area.
For instance, a Seattle mortgage broker will know the applicable property tax rates for your county, as well as other expenses which are common to the local area (such as transportation). Your mortgage broker will reference these other costs so that you don’t have a distorted sense of the financial burden of your mortgage loan. This is one reason why you should consider obtaining a Seattle mortgage broker.
Finding a Seattle Mortgage Broker Who Can Help You Read Your GFE
As you can see, the GFE is just the beginning of navigating the choppy waters in the mortgage loan industry and without the assistance a mortgage broker provides, many people feel like they’re drowning in fees and expenses they don’t have the framework to understand.
If you’re beginning the process of buying a home and feel like finding a mortgage broker you can trust would make the situation more manageable, contact the mortgage loan experts at Sammamish Mortgage today to learn more about Good Faith Estimates and the “real costs” of your mortgage loan offers to make sure you get the best deal on a mortgage loan you can.
Have questions? Sammamish Mortgage is a local, family-owned company based in Bellevue, Washington. We serve the entire state, as well as the broader Pacific Northwest region. Please contact us if you have mortgage-related questions. Last Updated: