Good Faith Estimate, Ethical or Unethical
A good faith estimate is a DETAILED breakdown of ALL the costs associated with the closing of your mortgage. It has the broker fees down to taxes and insurance and everything in between. When I give a Good Faith Estimate to my clients I am as close to the HUD as i can be. (a HUD is a settlement closing statement that you sign at closing with all closing costs associated with the loan) I put my charges which are broker charges, the lender charges which is accurate because i have closed with them numerous times, Interest per diem (per day) Mortgage insurance premium, homeowners insurance reserves and prepaids, title fees, goverment and recording fees and extras such as survey and pest inspection. I, on my good faiths always put accurate estimates as close as possible and yes the closing costs look high at the moment but let me explain why... Right now we are in May, taxes are due in Nov. of every year. If you close in May you have whatever is left over in the month of May and all of June before your first payment is due in July, so 2 months and count from Nov to May that is 6 months + 2 months (Dec, Jan, Feb, Mar, Apr, May + June and July the 2 months I spoke about previously) which totals 8 months so right now the lender is requiring 8 months of taxes in escrow which is pretty high, plus 2 or 3 months of homeowners insurance (2 for the 2 months befor payment is due and sometimes 1 more month in case your premium goes up) and on top of that 1 year PIF of homeowners insurance. Plus i also ACCURATELY disclose closing costs, title insurance intangibles and state tax stamps, broker and lender fees plus appraisal, survey and inspections. So 8 months of taxes increase the "prepaids" so your total closing costs are a little high but it is what you will need wether you go here or down the street to "Whatever Mortage Co you choose". By law I only have to tell my borrower what I am charging as the broker because i can only control my fees everything else is out of my control. Most brokers or lenders you go to will only accurately disclose they're fees and really Low Ball everything else such as saying title is 100$ and taxes is 2 months etc. and when you compare your going to like "whatever Mortgage Co." shows you better. But when you get to closing and your closing costs are $5,000.00 higher then you thought your going to ask "hey, this isn't what you told me i was going to pay!" and they will say "oh, well i have no control over those fees, that's not my company how am i supposed to know what they are going to charge you!" and they are right it's not in their control but they do have an idea because we know more or less what title charges from experience, we know how many months of taxes and insurance are being collected, they just wanted you to come to them and will do what it takes,if you have the money you most likely will close so you don't have to do the WHOLE process over again but that is an unethical broker in my eyes. So if you want truth, honesty and ethics you can count on me you might not like what i have to say, better yet show you, but it is the truth and trust me there will be no suprises and you will close happy and feel comfortable with your transaction 100%. Mind you the 8 months of taxes arebased on loans that are escrowed in most cases escrows (paying taxes and ins with mortgage) are inevitable.
Daily Rates
Conventional 30 Yr. Fixed Rate: 4.875% *
FHA 30 Yr. Fixed Rate: 5.00% **
USDA (100%) 30 Yr. Fixed Rate: 5.250% ***
* Based on a 150K sale price and 10% down with an APR of 5.865
**Based on a 150K sale price and 3.5% down with an APR of 6.105
***Based on 150K sale price and loan amount of 153K and APR of 5.649