Helpful Tips, Legislation

Good or Bad – The New Good Faith Estimate

October 20, 2009 by · Leave a Comment 

The new Good Faith Estimate makes its debut January 1, 2010.

Expanded from 1 page to 3 pages, the legislators responsible for the new Good Faith Estimate want it to be simpler for homeowners and home buyers to understand than the former version.

By most accounts, Congress will meet this goal. 

http://www.hud.gov/content/releases/goodfaithestimate.pdf

The new Good Faith Estimate includes plain-English explanations of every fee, charge, and interest payment involved in a purchase or refinance.  It also includes a section called “The Shopping Cart” in which applicants can compare lenders.

The new Good Faith Estimate is concise, too.  Using a series of “Yes/No” checkboxes on Page 1, mortgage lenders specifically note:

  • The interest rate on the mortgage
  • Whether the interest rate can change over time
  • Whether the loan carries a prepayment penalty
  • The length of the rate lock

Currently, this information is spread across 3 separate forms. 

Furthermore, the new Good Faith Estimate simplifies rate-and-fee comparisons, showing applicants how a lower rate can be available for a higher set of fees, and vice versa.

For all of its clarity, though, the new Good Faith Estimate still fails to address the issue of “suitability”.  As in, is this the right loan for the right borrower?  That’s something only a qualified mortgage professional can do.

For suitable advice, talk with a qualified mortgage professional who both listens to your needs and helps you plan for them.  Great terms on an unsuitable loan are often worse than “good” terms on the right one.

Need more expert advice? Ask the team of Certified Mortgage Planning Specialists at Benchmark Mortgage.

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James K Barath, CMPS®

James K Barath is a Certified Mortgage Planning Specialist®, Certified FICO® Professional, Certified Military Housing Specialist® and your FHA Home Loan Expert. He is also a graduate of Purdue University, The CMPS Institute, Dale Carnegie Human Relations Course & Napoleon Hill Foundation's PMA Science of Success Class. It's your home and your future. It's his profession and his passion. He is ready to work for your best interest. Contact James for your FREE Home Loan Approval !  His Motto: I Facilitate the American Dream Through Responsible Mortgage Lending and Financial Literacy!

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