Good Faith Estimate

“Buy a house,” they said. “Stop throwing away money on rent,” they said. “Home ownership is so rewarding,” they said. And maybe it is, but as our eyes glaze over just from our efforts to choose a mortgage lender, we’re not so sure the reward is worth the hassle.

Luckily for us, choosing a lender is a process that can be made slightly easier by comparing good faith estimates, or GFEs, from multiple companies. A good faith estimate tells us how much the loan we want would actually end up costing us, including fees, taxes, commissions, and any other associated charges.

When we apply and get approved for a home loan, the lending firm has three days to provide us with a GFE, and—bonus—the information we receive is standardized, which means we’ll get the same type of info from every lender to which we apply. This makes it a lot easier to do a straight comparison and find out which loan is going to best fit our needs.

One caveat—it’s called an estimate because it’s just that: an estimate. There may be differences between a GFE and what we actually end up paying. Sometimes these differences are legit—a home inspector ended up charging more than was originally planned, for example—and sometimes, they’re bogus. If we suspect that fee discrepancies in our home loan fall into the latter category, we can contest the fees and, in some cases, get them reduced or eliminated.