Good Faith Estimate in Lending
The Good Faith Estimate (now the Loan Estimate) is a standardized disclosure of mortgage settlement costs. It allows borrowers to compare offers from multiple lenders on an equal basis before committing to a loan.
What the Loan Estimate Shows
- Loan amount, interest rate, and monthly payment
- Estimated closing costs by category
- Cash needed to close
- Annual percentage rate (APR)
- Total interest percentage over the loan life
Cost Categories
- Origination charges: Lender processing and underwriting fees
- Lender-selected services: Appraisal, credit report
- Shoppable services: Title insurance, survey
- Taxes/government fees: Doc stamps, intangible tax (FL)
- Prepaids: Insurance, prepaid interest, property taxes
Tolerance Limits
Zero tolerance for lender fees and transfer taxes. 10% tolerance for recording fees and listed-provider services. Unlimited tolerance for prepaids and unlisted-provider services.
Related Terms
- Closing — Costs finalized at closing
- Escrow — Escrow deposits on the estimate
- Equity — Loan structure affects equity
Barnes Walker Title Services
Barnes Walker Title coordinates with lenders to ensure accurate settlement cost disclosures for Florida closings. Submit a title inquiry for assistance.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC