G.F.E. (Good Faith Estimate):

Once you have spoken with a mortgage consultant and have decided upon the type of mortgage program you think you would like to go with, that company is required within three days to send you a GFE or Good Faith Estimate by Real Estate Settlement Procedures Act (RESPA). The GFE will be an itemized list of all of the fees and costs associated with your loan. We recommend that you shop you loan with several banks/lending institutions to ensure you get the best rate and program for you. Your buyer’s agent should be able to make some recommendations on who you should shop your loan with. Once you have your GFE’s from your competing lenders, you can compare them against one another.  Along with compilation of all of the estimated lender fees and closing costs, the rate that the lender is offering to you will also be on the GFE . The two most important things to consider when choosing which lender to go with are the fees you are being charged and your interest rate.  Keep in mind that the GFE is just an estimate. The final closing costs may be different than the estimate once the lender knows how much your hazard insurance and final costs will end up being.

What is RESPA?

RESPA stands for the Real Estate Settlement Procedures Act.  It was established in 1974 to protect the borrower from unfair lending practices. RESPA requires that consumers receive disclosures at various times in the transaction and outlaws kickbacks that increase the cost of settlement services. Some disclosures spell out the costs associated with the settlement, outline lender servicing and escrow account practices and describe business relationships between settlement service providers.