The Good Faith Estimate

A good faith estimate must be provided by a mortgage lender in the United States to a customer, as required by the Real Estate Settlement Procedures Act or RESPA.The estimate is of the fees due at closing and must be provided within three business days of applying for a loan.

These mortgage fees, also called settlement costs, cover every expense associated with a home loan, including inspections, title insurance, taxes and other charges.

For a Texas mortgage loan, texasmortgage line will send the applicant a line item form estimating the fees and closing costs for their particular mortgage loan transaction specific.

Some of the mortgage fees are explained below:

Origination Fee: A fee paid to the mortgage loan broker for co-ordinating all parties in the transaction, processing the paperwork, ordering appraisals, verifications for employment, income, assets, payoffs, credit and whatever else is required by the funding mortgage bank.

Discount Fee: This fee is not charged in every transaction, it is a fee paid directly to the funding bank, in order to buy down the rate if the borrower so chooses.

Underwriting Fee: A fee charged by the funding mortgage lending bank to offset upfront costs for processing and reviewing the file.

Document Preperation Fee: A fee charged by the closing attorneys to review the complete file, and send out closing documents to the title company.

Processing Fee: This fee is charged by a contract employee of the mortgage company to help co-ordinate the processing of the loan file itself.

Hazard Insurance: This is the borrowers Homeowners Insurance premium which for a purchase mortgage transaction, 12 months is always charged at closing, so that the property which is the collateral for the mortgage loan, is fully insured.

Reserves: For escrow or Escrow Account. If the borrower is required to in some cases, or if the borrower chooses to set up an escrow account, in which the prorated monthly insurance and property tax payment is included along with the mortgage loan payment, then an account is set up and funded with reserves, at closing, so that there is enough money to pay the property taxes and 12 more months of the HOI, when it is due.

Escrow Fee: The title company will charge an escrow fee as part of their payment for the closing.

Endorsement Fees: The title company will be asked by the bank to insure certain aspects of the property, and are called endorsement fees.

Recording Fees: After the closing, certain documentation must be recorded at the county courthouse so that the transaction is on file, and new ownership, and mortgage amount is on legal record.

There will be other fees on the Good Faith Estimate, but are self-explanatory, such as the appraisal fee, survey, the title company may have some small assorted fees, and fees that will vary depending on the mortgage bank that is funding the transaction.

Lee Penn | Texas Mortgage Line | 281.701.1655