A good faith estimate is a form you receive when applying for a home loan and it details the amounts and descriptions of charges you will incur. The face of the form may vary from different companies but should have the same information. Depending on your loan amount and type of product you are buying the numbers will vary. Typically the bottom line of the good faith for a standard refinance or purchase should not exceed 3.5% of the loan amount and that amount will include not only outside fees for services but amounts that benefit you directly (taxes, insurance, prepaid interest, etc). Recently I looked at a good faith and the original offer for the property was $189,900 and the seller (the bank) countered with $192,000, providing the buyer with a 6% contribution to their costs. Since the price went up, the real contribution amount came down and the buyer is going to pay interest on the higher price of the property over the long term. The loan officer added a 4% origination fee to the good faith, saying that the seller was paying it and that it benefited the buyer by buying down the rate. After I looked at all of the fees and questioned their validity, the buyer questioned the loan officer and the buyer informed me that the lender told her that some of the numbers were misplaced and what started as an $18,000 cash to close from the buyer, the amount went down to $4800 plus the earnest deposit of $1900, quite a difference.
Please question the people you hire, they are working for you, you are paying them to do a "good" job for you.
If you feel that something isn't right, it probably isn't right.
After seeing these types of transactions resurface I would like to offer consulting on your transactions ( you can fax to me) and after looking at your paperwork if everything looks good, no charge from me. If I can save you money, the fee is $100.00.
Also available is an education tool to teach and guide you through general finance principals. This booklet was written with the intent of helping others understand very simple rules of finance and to help make your money go further. The cost of the book is $25.00 (includes shipping or delivery in the U.S.). Please email me if you are interested in purchasing the Simply Money guide.
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