If you plan on getting a mortgage for your new Fort Lauderdale luxury home, make certain you receive a Good Faith Estimate (GFE) from the lender. A Good Faith Estimate used to be a complimentary service provided by reputable mortgage lenders. Today the Federal Government made the document required for every mortgage inquiry.
The format of the GFE is dictated by the federal Real Estate Settlement Procedures Act which requires lenders to provide an estimate of the charges and fees due at closing. Lenders have three days to make it available.
Essentially, the GFE looks like a bill. It features a list of fees and charges denoted by three-digit codes. The GFE is grouped into sections to make it more readable, and although at first glance the resulting grid looks overly complicated, after you scan through it once or twice, it actually makes sense. The reason it is a good idea is because of the number of charges that may or may not be on there. It prevents sudden last-minute cash flow surprises at closing.
Once you receive your GFE, you’ll also receive a Truth in Lending (TIL) disclosure form. This gives you the annual percentage rate for your mortgage, taking into account mortgage insurance, discount points and other assorted fees.
The GFE is just what it says – an estimate. This isn’t so that the lender can suddenly raise the prices: there is a built-in variability to the different processes that truly cannot be guaranteed until the last ‘i’ is dotted and the last ‘t’ crossed. The figures quoted in a GFE can rise or fall as much as 10 to 15 percent or more by closing. The GFE comes in quite handy when you’re getting a mortgage for your Fort Lauderdale property because you can compare it with the final, see where any differences appear, and be assured that it all makes sense. If getting a mortgage meant waiting until closing to get an idea of the charges, the closing could be quite shocking!
Getting a mortgage is an important part of becoming a Fort Lauderdale homeowner for many people. Understanding the costs at every step of the way can be an integral part of the decision-making process. As a full-service Fort Lauderdale real estate team, we can help guide you through the entire process of home buying. Contact us if you’re thinking about purchasing a Fort Lauderdale luxury home.
