A Good Faith Estimate (GFE) is a disclosure of the settlement charges likely to be incurred at closing. It’s required under the Real Estate Settlement Procedures Act (RESPA) law to be given to borrowers within 3 days of taking an application. On the GFE you will see a list of the interest rate, term, loan amount and all other charges and fees you can expect to pay.

Listed below are items most often omitted from the GFE at the time of application but are charged to you closing. Review your Good Faith Estimate with your loan officer to insure its accuracy and don’t be afraid to ask questions. Your loan officer knows what these items will be upfront and you should too before you agree to do business with that company.

• Fees: Can include Discount Fees or Points, Commitment Fees, Application Fees, Appraisal Fees, and Origination Fees. Do they appear?
• Escrows: If you are paying taxes and insurance through your mortgage, escrow accounts will need to be set to pay these. Most banks will collect 2 months worth of homeowners insurance, flood insurance and mortgage insurance and 3 months of your taxes at the closing to set up these accounts. Are they included?
• Pre Paid Items: Homeowner’s insurance and flood insurance are due to be paid in full for the first year prior to closing. Are they listed?
• Interest: You are required to pay interest per diem from the date of your closing until the end of the month. Is it accurate?

Be sure to always ask for your Total Settlement Charges which include both Closing Costs and Pre Paid Items. Loan officers will often quote only the Closing Costs.