The New Good Faith Estimate Of Closing Costs
Once you’ve decided to refinance the mortgage on your Delaware home, don’t assume that the company you have your mortgage with will give you the best deal. Instead, be sure to shop around for the best loan.
The process of contacting different mortgage companies and comparing the different offers can be somewhat confusing. At times, it may even seem like you're trying to compare apples and oranges.
The good faith estimate is a tool you can use to help make this comparison. In this regard, the U.S. Dept. of Housing and Urban Development announced last month that it will require mortgage companies and brokers to use a standard 3-page Good Faith Estimate (GFE). Here's an excerpt from the press release issued November 12, 2008:
"For the first time in more than 30 years, the U.S. Department of Housing and Urban Development today issued long-anticipated mortgage reforms that will help consumers to shop for the lowest cost mortgage and avoid costly and potentially harmful loan offers. HUD will require, for the first time ever, that lenders and mortgage brokers provide consumers with a standard Good Faith Estimate (GFE) that clearly discloses key loan terms and closing costs. HUD estimates its new regulation will save consumers nearly $700 at the closing table."
In addition to the new GFE, HUD is also requiring lenders to use a new HUD-1 Settlement Statement. Each designated line on the HUD-1 will include a reference to the relevant line from the GFE so that consumers can easily compare the estimated closing costs with the actual costs that they see at settlement.
To take a look at the new forms, click on the links:
Standard Good Faith Estimate
HUD-1 Settlement Statement
Unfortunately, lenders will not be required to use the new form until January 1, 2010.
