Good Faith Estimate
This Good Faith Estimate (GFE) details all the fees and costs associated with closing your loan charged by both the loan originator and other settlement service providers. Pursuant to federal regulation, some of the charges set forth under the “Itemized Settlement Costs” section cannot be increased at settlement and some charges may not increase by more than 5 percent, absent unforeseeable and extraordinary circumstances.
The mortgage loan and closing costs offer outlined in this GFE is dependent on final underwriting, including assessment of your credit rating, property appraisal, and other criteria. If after final underwriting you do not qualify for the mortgage loan and closing costs outlined on this GFE, loan originator is obligated to issue you a new GFE no later than 5 business days prior to settlement date. The offer extended in this GFE is valid for thirty (30) days.
Your home is the security for this loan. You may lose your home if you do not make your payments. U.S. Department of Housing and Urban Development offers certified homeownership counselors who can answer questions and explain specific costs and fees you are being charged to complete the loan transaction. For a housing counseling agency near you, please call 1-888-466-3487.
Name and Address of Borrower: / Property Location: / Date:Company Name, Address and Phone Number of Loan Originator: / Loan Officer, Broker or Agent Managing Transaction: / Loan and/or File Reference Number:
Loan Definitions
· Interest Rate: Price for borrowing funds.
· Annual Percentage Rate (APR): The APR includes the interest that has to be paid on a loan, but also some other costs, particularly fees that the loan originator charges for making the loan. Taxes, escrow amounts and hazard insurance premiums are not included. The APR is a useful gauge for comparing the total cost of mortgage loans.
· Required Closing Costs: Amount you must pay to close on the mortgage loan.
· Point(s): Fees that the mortgage lender charges for making the loan. One point equals one percent of the mortgage loan amount.
· Monthly Payment: Amount of principal and interest you must pay monthly to the holder of your mortgage note.
Loan Amount / Interest Rate / Annual Percentage Rate (APR) / Required Closing Costs (including points) / Monthly PaymentYou are borrowing
$______. / Your interest rate is ____%.
fixed
variable* / The cost of credit as a yearly rate (the APR) is ____%. / Your required closing costs are itemized below and are reliably estimated to total $______, excluding down payment if any. / Your monthly principal and interest payment is $______.
*If checked, your loan contains a variable rate feature. During the term of your loan, the interest rate could increase to ____%, resulting in monthly payments of $_____. See the variable rate disclosures separately provided to you for further information about how your rate, payment, and loan term may be adjusted.
Your Scheduled Payments for Principal and Interest Will Be:
Number of Payments / Monthly Payments / Total of Scheduled Payments
______/ $______* beginning ______20__ / $______
* This amount does include taxes or hazard insurance.
This amount does NOT include taxes or hazard insurance.
Loan Origination Charges
· Origination Charge or Fee: The fee imposed by an originator to compensate for making the loan. Usually calculated in the form of points (a percentage of the amount loaned) and paid at closing.
· Yield Spread Premium: A payment from a lender to a mortgage broker in exchange for the borrower agreeing to a higher than market rate (above par) interest rate. This payment is used to compensate the broker for originating the loan.
· Discount Points: Fee paid by borrower to lower the interest rate on the loan. One point equals one percent of the mortgage loan amount.
IMPORTANT: UNTIL YOU LOCK IN YOUR INTEREST RATE, THESE PAYMENTS MAY CHANGE.
Amount of Loan: $______
Interest Rate / Origination Charge Paid by Borrower / Yield Spread Premium (for brokered transactions) / Borrower Paid Discount Points / Annual Percentage Rate or APR / Monthly Payment / Total Finance Charge for LoanMarket Rate
____% / Amount you must pay to originator to make the loan $______. / Amount lender will pay to broker to make the loan $0.00. / Amount you may pay to originator to lower interest rate $0.00. / The cost of credit as a yearly rate (the APR) is ____%. / Your monthly principal and interest payment is $______. / Finance charge for borrowing $______for __ years is $______.
Above Market Rate
____% / $______/ $______/ $0.00 / ____% / $______/ $______
Below Market Rate
____% / $______/ $0.00 / $______/ ____% / $______/ $______
Additional Loan Terms
Late Charge: If payment is late, you will be charged $______.
Prepayment Penalty: If you pay your mortgage loan off early, you will be charged a financial penalty.
will not be charged a financial penalty.
Balloon Payment: At the end of mortgage loan, you will have a balloon payment of $______.
this mortgage does NOT have a balloon payment.
Private Mortgage Insurance (PMI) is required for your loan.
you may cancel PMI when your loan balance is ____% of the home’s value, or by paying an additional fee of $____.
is not required for your loan.
Escrow Account: you will be required to have an escrow account for payment of taxes and hazard insurance.
you may pay $_____ to cancel the escrow requirement.
you may not cancel this escrow requirement.
is not required on this loan. Borrower will be responsible for the payment of taxes and hazard insurance.
Itemized Settlement Costs
These costs reflect what will appear on the HUD-1 Settlement Statement. By federal regulation, the HUD-1 must be made available to you for review at least two business days prior to your loan closing.
Lender Required Settlement Costs:
Settlement services and settlement-related services required to close the loan / Amount Paid By Borrower / Lender Required or Selected UseIf marked as “required” cost cannot increase. / Borrower Shoppable or Selected Use
If marked as “shoppable” cost may increase no more than 5%.*
Items Payable in Connection with Loan (Series 800 on HUD-1)
Loan Origination Fee (from above) / $ / Cost cannot increase / Not applicable
Loan Discount Points (from above) / $ / Cost cannot increase / Not applicable
Appraisal Fee / $ / Cost cannot increase / Cost can increase by 5%
Credit Report / $ / Cost cannot increase / Cost can increase by 5%
Lenders Inspection Fee / $ / Cost cannot increase / Not applicable
Mortgage Insurance Application Fee / $ / Cost cannot increase / Not applicable
Assumption Fee / $ / Cost cannot increase / Not applicable
Yield Spread Premium (Credit to Borrower) / (-) / Not Applicable / Not Applicable
Application Fee / $ / Cost cannot increase / Not applicable
Document Preparation Fee / $ / Cost cannot increase / Not applicable
Flood Certification Fee / $ / Cost cannot increase / Not applicable
Tax Certification Fee / $ / Cost cannot increase / Not applicable
Items Required by Lender to be Paid in Advance (Series 900 on HUD-1)
Interest from __ (date of settlement) to ___ (first monthly payment) at $___ per day / $ / Not Applicable / Not Applicable
Mortgage Insurance Premium for ___ months to ____ / $ / Cost cannot increase / Not Applicable
Hazard Insurance Premium for ____ year(s) to ____ / $ / Not Applicable / Not Applicable
Flood Insurance / $ / Cost cannot increase / Cost can increase by 5%
Reserves Deposited with Lender [Escrow Account Deposits] (Series 1000 on HUD-1)
Hazard Insurance ___ month(s) at $___ per month / $ / Not Applicable / Cost can increase by 5%
Mortgage Insurance ___ month(s) at $___ per month / $ / Not Applicable / Cost can increase by 5%
City Property Taxes ___ month(s) at $___ per month / $ / Not Applicable / Cost can increase by 5%
County Property Taxes ___ month(s) at $___ per month / $ / Not Applicable / Cost can increase by 5%
Annual Assessments ___ month(s) at $___ per month / $ / Not Applicable / Cost can increase by 5%
Aggregate Adjustment / $ / Not Applicable / Not Applicable
Title Charges (Series 1100 on HUD-1)
Settlement or Closing Fee to ______/ $ / Cost cannot increase / Cost can increase by 5%
Abstract or Title Search to ______/ $ / Cost cannot increase / Cost can increase by 5%
Title Examination to ______/ $ / Cost cannot increase / Cost can increase by 5%
Title Insurance Binder to ______/ $ / Cost cannot increase / Cost can increase by 5%
Document Preparation to ______/ $ / Cost cannot increase / Cost can increase by 5%
Notary Fees to ______/ $ / Cost cannot increase / Cost can increase by 5%
Attorney’s Fees to ______
(includes above items numbers: ______) / $ / Cost cannot increase / Cost can increase by 5%
Title Insurance to ______
(includes above items numbers: ______) / $ / Cost cannot increase / Cost can increase by 5%
Lenders Title Insurance for $______Coverage / $ / Cost cannot increase / Not Applicable
Owners (Buyer’s) Title Insurance for $______Coverage / $ / Not Applicable / Not Applicable
Government Recording and Transfer Charges (Series 1200 on HUD-1)
Recording Fees:
Deed $______
Mortgage $______
Release(s) $______/ $ / Cost cannot increase / Not Applicable
City/County Tax/Stamp
Deed $______
Mortgage $______/ $ / Cost cannot increase / Not Applicable
State Tax/Stamps:
Deed $______
Mortgage $______/ $ / Cost cannot increase / Not Applicable
Additional Settlement Charges (Series 1300 on HUD-1)
Survey to ______/ $ / Cost cannot increase / Cost can increase by 5%
Pest Inspection to ______/ $ / Cost cannot increase / Cost can increase by 5%
Courier Fee ______/ $ / Cost cannot increase / Cost can increase by 5%
$ / Cost cannot increase / Cost can increase by 5%
$ / Cost cannot increase / Cost can increase by 5%
Total Settlement Charges [Required Closing Costs] (Line 1400 on HUD-1) / $
*Exception to firm rate and 5% allowable increase is prescribed by federal regulation as unforeseeable and extraordinary circumstances.
Definition
Items Payable in Connection with Loan (Series 800 on HUD-1)
· Appraisal Fee: Fee paid for a written analysis or opinion of the estimated value of a property prepared by a qualified appraiser.
· Credit Report Fee: Fee for a report of an individual’s financial condition and credit history prepared by a credit bureau used by a lender determining a loan applicant’s creditworthiness and also used in the final underwriting process.
· Lenders Inspection Fee: Usually only applies to newly constructed home or where an appraisal report requires repairs to an existing home. If required, this fee would cover inspections made by employees of your lender or by an outside inspector.
· Mortgage Insurance Application Fee: If you are required to purchase mortgage insurance, this fee covers the processing of an application.
· Assumption Fee: Fee that may be charged for the lender’s agreement to start collecting payment from the buyer instead of the original borrower/seller.
· Application Fee: Fee that may be charged for helping to complete and review an application.
· Document Preparation Fee: Fee that may be charged for the preparation of final legal papers such as the mortgage contract, deed of trust, note or deed.
· Flood Certification: Fee that covers the cost of the lender obtaining a flood certificate that identifies what type of flood zone the property is currently in and the flood certification company will also notify the lender when flood zone is changed by the re-drawing of the flood maps by FEMA (Federal Emergency Management Agency).
· Tax Certification Fee: Fee that pays for a company to confirm receipt of payment of property taxes by the appropriate county through a loan escrow account.
Items Required by Lender to be Paid in Advance (Series 900 on HUD-1)
· Per diem interest: Payment that lenders may require from borrowers at settlement to cover interest that accrues from the date of settlement to the first monthly payment.
· Mortgage Insurance Premium: For non-conventional loans (i.e. FHA, VA), lender may require you to pay your first year’s mortgage insurance premium or a lump sum premium that covers the life of the loan, in advance, at the settlement. For conventional loans, there is usually no up front fee and the cost of the insurance is simply collected one month at a time with your monthly mortgage payment.
· Hazard Insurance Premium: Payment for first year’s hazard insurance premium that lenders may require from the borrower at settlement, to cover loss due to fire, windstorm, and natural hazards.
· Flood Insurance Premium: Payment for first year’s flood insurance premium that lenders may require from the borrower at settlement, to cover loss due to the hazards of flood.
Reserves Deposited with Lender [Escrow Account Deposits] (Series 1000 on HUD-1)
· Escrow Account: Money collected in advance by the lender, usually on a monthly basis, for the payment of hazard insurance, mortgage insurance, and city/county property taxes.
· Aggregate Adjustment: This adjustment equals the difference between the escrow deposits required under aggregate accounting and the sum of the escrow deposits required under single-item accounting. The adjustment will always be either a negative number or zero (-0-).