So, you've gone to a mortgage broker and filled out an application. He has told you how much you will have to pay each month and how much you will have to pay all at once. How do you know that the loan fees are reasonable? How does this loan compare to others you've been given?
Look at the GFE.
You can use the Good Faith Estimate (GFE) to get the best price on your loan. If you don't give this legal-sized piece of paper a good, long look, you might as well just throw your money away.
This one document will tell you about every single fee on your loan. It not only lists your charges, but it also breaks them down so you can see who they are paid to. Look at more than just the dollar amounts on this form. Pay close attention to the person or group that gets those dollars. Even though the big number at the bottom can be scary, seeing all the people who worked together to help you may make it all seem worth it.
You can use this list to make sure that everyone who charges a fee is acting in a fair way. All Good Faith Estimates must have the same information, so you can compare like with like. Also, make sure you have a "Good Faith Estimate," not just a list of costs put together by the mortgage broker. They might leave some things out, but the GFE makes sure they don't because the government makes them tell you about all fees.
Your real estate agent may also give you a list of fees. Don't depend on this form. They do this to give you an idea of fees and costs, but they don't have all the information they need from the lender to give an accurate quote. A Good Faith Estimate can only be given by a mortgage company.
Since the GFE lists all fees in black and white, it's a great way to compare mortgages. More importantly, it makes it impossible for a dishonest mortgage broker to add charges that can't be explained. A mortgage broker or bank must give you a GFE as soon as possible after you apply. Use this to make sure you are happy with the fees that are being presented.
My best advice for you as a homebuyer is to keep the original copy of your GFE that you signed. This document is very similar to the final papers you will sign at the end of the deal. The way these forms are set up makes it easy to see if something has changed. Remember that the numbers will change because that's how estimates work, but your broker should be able to explain any big changes.
