15 Nov What is a good faith estimate? Do I need one?
What is a good faith estimate?
When I asked for this information from Mike Coady. With Edge Home Finance. Here is his response.
What is a LOAN ESTIMATE anyways? And why do I need one?
First, a loan estimate is an important piece of the puzzle when buying a home. It is going to point out
important parts of the loan you want to be aware of. Here it is laid out in this easy to follow below:
What is the loan amount?
What interest rate will I pay and how does that effect my payment
Is there a Prepayment penalty? No normally but be aware if it is an arm.
Does it have a Balloon payment? This is rare but found in some loans.
What is my principal and interest payment amount?
How much is Mortgage insurance? And is it applicable depending on loan type and amount down.
What is estimated taxes, insurance, and assessments. Are there homeowner’s association fees. If so, how much?
List of closing fees associated with the closing of the home. Such as title fees, title insurance, mortgage and registration tax.
And finally, “CASH TO CLOSE”. What is the amount you will be required to bring to closing.
Okay, so know you know what a Loan Estimate is. And its purpose, and then how to understand it. Now why do I need one you might ask?
And here is that very important reason. Now You can speak with several different loan officers from
competing banks. Then ask them for a Loan Estimate. Then you’re able to compare to make sure you are getting the best
deal for your new home purchase. Specifically, you will have side by side comparisons and be able to see the
differences in costs and rates. In addition, you can look at different loan options for your consideration. Each lender might have a new program to consider. This provides you with overview of the Loan Estimates. And you’re able to understand the numbers and pick the best Loan officer and program for you.