From the category archives:

Mortgage Shopping Guide

In my previous post, I touched on some new lending regulations and the standardized Good Faith Estimate for San Mateo home buyers from HUD to help minimize the confusion of different forms.  HUD’s goal was to ensure lenders quote realistic fees, help avoid last minute closing cost surprises and help the home buyer make an apples to apples comparison between loan products.

What Does the New GFE Look Like?

Below you will find a blank copy of the new 3 page Good Faith Estimate (GFE) that all lenders must supply within 3 days of application after you have an accepted contract.

New Good Faith Estimate for 2010 by HUD
Where are the Lender’s Fees and Costs shown on the New GFE?

Below are a few key items for home buyers to understand at on the new Good Faith Estimate.

Fees Paid to Lender from Borrower – Cannot Change at Closing

All fees paid to the lender/broker from the borrower are consolidated on Block A Page 1 and will also show on Section 1 Page 2.  These fees cannot change unless the loan program or the terms of the loan change.  These fees include processing fees, underwriting fees, appraisal fees, document preparation fees, loan origination fees and other pertinent fees to close the loan.

Title and Escrow Fees to Record Your Loan – Can Be No More than 10% Off

The estimates for government recording charges (state/local fees to record your loan and title documents) and third party service providers such as title and escrow services that the lender recommends to a borrower will be itemized in Section B.  The amount you pay at closing can be no more than 10% difference than what was originally quoted to you if you use the recommended service provider.  If the estimated charges exceed the 10% threshold, the lender is responsible to make up the difference.  If you choose your own Title and Escrow Company, the lender is not responsible for the difference.

What Fees Can Change without Penalty to the Lender?

The estimates for services that the buyer chooses on their own can change without any penalty to the lender.  These fees can be:

  • Title and escrow charges (if you decide to use a company not recommended to you by the lender)
  • Initial escrow deposit
  • Pre-paid interest (determined by the day of the month you close)
  • Homeowner’s insurance

These fees are reflected on lines 4,5,6, 9, 10, 11 and are also consolidated in Section B

Paying Points to Lower Your Interest Rate?

If you have decided to pay points (remember one point is 1% of the loan amount) to lower your interest rate, all of the fees will be itemized on Section 2 Page 2 so the borrower can compare to other loan programs.

Chart to Explain Fees and Costs on the New GFE

These charges cannot increase at closing The total of these charges can increase up to 10% at closing These charges can change at closing
  • The lender’s origination charge
  • Your credit or charge (points) for the specific interest rate chosen (after you lock in your interest rate)
  • Your adjusted origination charges (after you lock in your interest rate)
  • Transfer taxes
  • Required services the lender selects
  • Title services and lender’s title insurance (if the lender selects them or you use companies the lender identifies)
  • Owner’s title insurance (if you use the companies the lender identifies)
  • Required services that you can shop for(if you use companies we identify)
  • Government recording charges
  • Required services that you can shop for (if you do not use companies the lender identifies)
  • title services and lender’s title insurance (if you do not use companies the lender identifies)
  • Owner’s title insurance (if you do not use companies the lender identifies)
  • Initial deposit for your escrow account
  • Daily interest charges
  • Homeowner’s insurance

Need Help Interpreting the New GFE?

Call me at (650) 520-0915 or email me at info@SanMateoMortgageBlog.com to schedule a no obligation consultation to determine how I may be able to help you get a San Mateo mortgage loan. If you’re currently working with another lender, I’d be happy to give you a second opinion and help you understand if you’ve chosen the right loan program and are getting the best rate.

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  • How to Read the New Good Faith Estimate
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  • How to Read the New Good Faith Estimate
  • How to Read the New Good Faith Estimate
  • How to Read the New Good Faith Estimate
  • How to Read the New Good Faith Estimate
  • How to Read the New Good Faith Estimate
  • How to Read the New Good Faith Estimate
  • How to Read the New Good Faith Estimate
  • How to Read the New Good Faith Estimate
  • How to Read the New Good Faith Estimate
  • How to Read the New Good Faith Estimate

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Big Banks May Stop Issuing Pre-Approvals

February 12, 2010

Big Banks May Be Nixing the Pre-Approval Process As lenders begin to work through the lending guideline changes from January 2010, some bigger banks have discussed eliminating pre-approvals.  Instead, they are opting to wait until a potential borrower is under contract before the bank starts looking at and verifying your income, assets and credit score.  [...]

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Part II: The 5 Secrets of Being a Skilled Mortgage Shopper

August 14, 2008

If you read Monday’s post about The 5 Secrets of Being a Skilled Home Home Mortgage Shopper, you already know my first two tips. Now, here are the final 3 secrets of being a skilled San Mateo Home Mortgage Shopper. 3. You Get What You Pay For In the consumer world, deals do exist and [...]

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Part I: The 5 Secrets of Being a Skilled Mortgage Shopper

August 11, 2008

In prior San Mateo mortgage shopping posts, I have explained why you should go beyond shopping for the mortgage interest rate, given you a series of questions to gauge a mortgage advisor’s financial expertise, and explained the real bargain, which is a San Mateo Mortgage Advisor who has earned your trust and confidence. Now it’s [...]

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Part II: Four Questions to Ask Your Bay Area Mortgage Professional

July 31, 2008

Last time, I gave you the first two questions to ask your Bay Area Mortgage Professional. Here are the final two questions to help gauge your Mortgage Professional’s financial understanding and the affect the current financial market will have on your financial situation. When the Fed changes rates, what does this mean for mortgage interest [...]

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