Good Faith Estimates and The House Buying Process

Good Faith Estimates (GFE) & The House Buying Process

When you find the right home, or know what you’re looking to spend, you’ll need to find a mortgage lender.  But before you can get approved for a loan, you have to find the home that you want to buy.  This is when you’ll want a lender to provide you with a Good Faith Estimate (GFE).  A good faith estimate is a form that includes all of the fees, payments, and financial information that you will be provided with by that specific lender.

The Good Faith Estimate Process

The eight steps in the process for a good faith estimate include:

  1. First you need to get prequalified by the lender
  2. Now you can go house shopping
  3. Next you put a contract on the house
  4. Once the contract is in place, you submit the pre qualified letter
  5. Now the contract is ratified (approved)
  6. After ratification, you’ll fill out a 1003 (Loan Application)
  7. Next you should get approved
  8. Three days after approval, you must receive a GFE from the lender

Now that you know the process, here is some more information to help answer any additional questions you may have about good faith estimates.

You Can Get Multiple Good Faith Estimates

You are not limited to only one good faith estimate.  You can acquire a good faith estimate from numerous lenders and banks so that you can shop for a loan that helps you buy the property that you want and aligns more closely with your wants or situation.

If the first lender gives an estimate, but it won’t cover the home you want, you can get a good faith estimate from another lender who will cover the cost of the property and closing.  You can also use this document to prove that you’ll be able to purchase the property once you are ready to begin closing the deal.

What Fees Are Covered and Not Covered by a GFE

One common question is if a good faith estimate covers closing costs.  A good faith estimate does not contain all of the closing costs, but it may have an estimate.  If you already have the property you’d like to buy picked out, the estimate should be more accurate than if you are still shopping for a property.  Because you can choose your own closing agent, the price could vary which is why you get an estimate and not an exact number.

A good faith estimate does include the costs of the loan, the terms of the loan, and almost all other finances for buying a home and using a lender.  Other fees which will not be included in your GFE include a title insurance policy, additional inspections, and other miscellaneous items.

Talk to your real estate agent, or the closing and settlement agent to find out any additional fees which may not be covered by the lender or in the GFE.

Bonus tip: You get to choose your own title, closing and escrow companies.  By shopping around you can find a great deal and sometimes lower some of the expenses when buying a home.

In some cases, and depending on how you negotiate when shopping, the seller of the house may be willing to pick up some of the costs outlined in the GFE, but that will depend on how quickly the seller wants to sell and your specific situation.

Where to Download a Sample GFE Form

As mentioned above, the GFE is a form you are provided with.  You can find a sample and download a good faith estimate form on the HUD website by clicking here.  The good news is you do not have to fill this out yourself.  It is handled by the lender.

A good faith estimate is not as scary as it may look when you first see it.  Your real estate agent and closing company look at these regularly and should be able to assist with any questions you have.  If you don’t feel comfortable asking them, we are happy to help.  Contact us at and one of our professional closing agents will be happy to alleviate any worries you have, and walk you through how we can help you with a hassle-free closing.

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