Good Faith Estimate helps buyers understand their mortgage
By admin - Last updated: Sunday, December 21, 2008 - Save & Share - Leave a Comment
Mortgage lenders and brokers are required by law to provide a buyer with a good faith estimate when the buyer is applying for a home loan. HUD is requiring that this estimate be easy for the buyer to read and provide clear answers to the questions the borrower may have regarding the mortgage. The good faith estimate should help borrowers understand:
- The term of the loan.
- Is the interest rate fixed or adjustable.
- Will there be a pre-payment penalty?
- Will there be a baloon payment due?
- What are the closing costs?
Make sure you receive a good faith estimate before signing on the bottom line when applying for a mortgage.