The Limits Of A Good Faith Estimate
REM # A593
By Ilyce R. Glink
Summary: A home buyer wonders about the limits of a good faith mortgage estimate. Ilyce points out several good online resources to help the buyer select the right mortgage.
Q: My question deals with the good faith estimate. Could I ask the mortgage broker to work up a few different scenarios with different types of mortgages?
For instance, can I ask him to crunch the numbers for a 80/15/5 and a 80/10/10 and also see what the figures look like if I decide to pay points?
Is that too much to ask? I'm a visual person when it comes to numbers. I need to see them on paper to better understand this and make sure I am able to meet my mortgage obligations.
A: You can certainly ask your loan officer to put various scenarios in writing. But, typically good faith estimates are provided only after you apply for a loan. The lender may be happy to tell you what his or her fees will be in conjunction with several different loan types, but it may be unnecessary to ask for a good faith estimate since most of the fees (except any points) should be the same no matter what loan program you decide is right for you.
However, it concerns me that you have not taken advantage of the many online resources available to you that could help you work through the numbers yourself.
At BankRate.com, you can find out what various lenders are charging for a variety of different loans. You can also find calculators that will help you work through numbers.
Eloan.com also has an excellent amortization calculator (go to Eloan.com and at the bottom look up tools and mortgage calculators) that will help you play around with various scenarios, including if you decide to prepay your mortgage.
On my own website, ThinkGlink.com, I have a number of calculators available for you to use as well.
While any loan officer worth his or her salt would be delighted to help you do this, the only way you'll really understand the numbers is if you crunch them yourself. So, take some time and learn how the down payment and interest rate change your payment.
You'll be a much more knowledgeable borrower and will actually know what you're talking about with your loan officer.
NOTE: This column is distributed by Real Estate Matters Syndicate, PO Box 366, Glencoe, Illinois, 60022. This column may not be resold, reprinted, resyndicated or redistributed without written permission from the publisher.
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