GFE OverviewThe GFE is an estimate of the fees due at closing. It provides borrowers with a report of the lenders fees and terms, the interest rate, and third-party charges. The law requires your lender to provide you with a GFE within three days of your loan application. Once a lender gives you a GFE, it must honor those terms if you accept them within the stated time period. Loan experts recommend that you request GFEs from at least two lenders before committing to a loan. When you receive your estimates, you can expect the following:
- Origination Fees: The origination fees consist of lender fees, the interest rate, points, and transfer costs. Borrowers use this section to compare loans, because the fees are directly controlled by the lender and subject to negotiation. The estimated origination fees are fixed and will not change at closing.
- Settlement Services: This section lists charges for settlement services, such as title insurance, government charges, and title company services. If the fees escalate to more than a 10 percent difference at closing, the lender is responsible to cover the difference. These fees are similar among lenders because they are established by third-party companies. Taxes and government fees are generally identical, regardless of the lender you choose.
- Fluctuating Fees: The final section of the GFE lists fees that can change at any time, such as the daily interest rate, settlement fees not associated with companies identified by the lender, and homeowners insurance.
SEE ALSO: Fannie Mae Mortgages for Public Servants