What is GFE?
GFE is an abbreviation which stand for Good Faith Estimate. It is a kind of reply to your mortgage application which the bank you are applying to is obliged to send you within three days of receiving your application. Such an Estimate is supposed to help you understand or sum up the most vital terms of the leoan. Although all banks are required to provide you with GFE not all of them write it in very readable English, so it is good to know what it should consist. First of all, the GFE you receive should tell you whether the mortgage you applied for is fixed-rate or adjustable. Secondly, there needs to some kind of information about the interest rate and the amount of money you will need at closing. Then, there’s the Total Loan Amount (aka ‘Proposed Loan Amount’) and you should make sure it is what you expected as sometimes the bank may add some closing costs. Some other information that should me included in your GFE are as follows: mortgage broker’s fee, loan origination fee, processing and underwriting fees and oftentimes you can also learn from your GFE about Loan Discount Fee. So there is no doubt that it is an extremely important document which you should read carefully and fully understand as you have a lot to gain from the knowledge it provides.