A Good Faith Estimate is a required mortgage document that shows the interest rate, Monthly payments, and costs. But thinking that a Good Faith Estimate always reflects accurate, truthful, and guaranteed figures is a mistake. They are often used to “bait” prospective loan-seekers. A Good Faith Estimate that seems too good to be true… probably is.

Refinancing, or borrowing money to purchase a home, involves fees. But there is a surprising difference in these fees between various lenders. To quickly try to win your business, some mortgage lenders will present you with very attractive-looking good faith estimates, with low (or even missing) fees. It’s only weeks later, when you’re at closing time, when some mortgage lenders pull a “bait & switch,” sneaking in their hidden fees and extra charges. By then of course, you’ve invested so much time and energy into the process that it’s as painful to start over as it is to tolerate the extra charges.

Fortunately, there are ways to increase your chances of getting an honest and reputable mortgage lender from the get-go.

  • Talk to at least 2 different lenders, review their GFE’s, and talk (yes, “talk”) about them over with each lender, line-by-line.
  • Pay attention to whether or not the lender is really listening to you. Every borrower - and every loan - is unique, and there are many types of loans and loan packages to choose from. A good lender will choose the one best for you, rather than try to squeeze you into one that they’re used to dispensing, and/or one that is most profitable for them.
  • In refinancing, don’t let the loan officer convince you to NOT make your normal monthly mortgage payment. In this situation, no matter what arises, the borrow HAS to sign the refinance.

Also “bigger” is not “better.” If you choose a large, well-marketed lending firm, thinking you’ll get the “Wal-mart” of lenders, you just might. And while the possibility of getting a low-priced loan exists, it may not be much lower than the other guys, but you’re definitely going to get a no-frills level of service. That’s not good in an industry where communication and personal attention is an absolute must.

Above all, remember what your folks always told you: “If it sounds to good to be true, it probably is.”

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Written by Lisa Kratz and Mike Little of www.myidahohomeloan.com
Apex Mortgage  |  Meridian, Idaho  |  (208) 888-9251 Apply Now

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