A GOOD FAITH ESTIMATE (GFE) is really just an estimate that can be totally inaccurate, without any consequences.
In tiny print, it states that it’s only an estimate, and that fees can change. They are useful for lying from those that choose to, not really good for shopping.
Since rates change every day, until you want to lock, the quoted rate means nothing, until it is locked AND you are approved. It’s really frustrating for the consumer.
A HUD statement from escrow is MUCH more accurate, but you usually don’t see one until signing.
If shopping with a broker, just tell them to cut through the crap and ask them how much they need to make on your loan.
They are only in control of their fees and the rate that they offer you.
Title, escrow, and lender underwriting are out of their control. You can often choose the first two yourself if you wish.
Ask them if they will give you the PAR wholesale rate, so they don’t get any commission from the lender on the back end for overcharging you. It’s also known as YSP.
Also get buy down options. It is IMPOSSIBLE for them to get a commission if you pay discount points and buy down the rate.
If you want a “no cost loan” ask them to explain the fees and true costs to you,(and see if they even can) so you will know which is a better loan for you.
You will never see this back end commission until the day that you are signing docs, and if you don’t know where to look, you won’t even know it.
Contrary to what many think, The industry is highly regulated and everything must be disclosed.
A mortgage broker et al doesn’t (legally) get a penny back from Title, Escrow, or Appraiser, …and if they are getting anything from the lender it MUST be disclosed, but only in one spot on one line on your closing statement.
If it is a direct lender, who is lending their own money,
(BANKS, etc) the rules are completely different. They WILL NOT and DO NOT have to disclose if you were overcharged. They may tell you that they don’t have any fees, but it’s just built into the rate.
If you find someone that you can trust, it’s not a game. You may find out that calling around will just lead you to getting teaser rates, misquoted, and misled.
Nobody will do it for you for free, you will pay one way or another. Getting you into the best loan that you qualify for and can be approved for is what you will be paying for.
It might be a bank, it might be a broker, etc.
No simple answer.
