The Good Faith Estimate is a document that you will receive notifying you of estimated fees in obtaining a new mortgage. Fees are classified into two categories: non-recurring closing costs and recurring closing costs.
The estimates given for the non-recurring closing costs are one-time fees and are based upon the purchase price and estimated loan amount. These estimates should be very close to the figures you will see at close of escrow. Included in this category are title fees, escrow fees and points. The points quote will be accurate if the rate has been locked.
Recurring fees are ongoing costs associated with home ownership, and vary based on the following circumstances:
- If the date of the close of escrow changes, the prepaid interest amount will change.
- If you choose to have taxes and insurance impounded, the lender will collect “reserves,” which may not be reflected on your Good Faith Estimate.
- If your close of escrow date is near property tax due dates, expect that you may have to make a full property tax payment.
- The amount of homeowner’s insurance required by the lender may not be known until your loan has been approved and documents have been sent to title. Be prepared to pay the first year premium in advance on a purchase transaction.
Your Commerce Home Mortgage Consultant will provide an estimate of all anticipated fees for your loan transaction and is happy to discuss them in detail with you at any time. Depending on how we structure your loan, we may be able to provide a credit in escrow to cover some or all of your non-recurring closing costs.