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Author: Dwdonhoff Big gold star, 5000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 127815  
Subject: Re: Good Faith Estimates and Locking Date: 10/6/2001 7:41 PM
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Hi flobaby,

How accurate are they?

Not!

All depends on the amount of variables. It's called an "estimate" and not an "offer" because it remains changeable until the costs of the issues to be handled are known. This is the biggest problem for most people when they try to "shop" who they'll use for their loan via a GFE... the GFE is relatively worthless as a comparative tool until it's too late to switch.

Can the broker add a substantial amount more at the end that wasn't initially on the good faith estimate?

Sure. Every time an issue comes up that wasn't known initially, and costs are incurred to have it processed or handled, it goes to the GFE.

OTOH, an earnest and conservative broker may give an initial GFE that's on the high side, and costs get carved down as the process eliminates them. Better to under-promise and over-deliver. Of course, those who choose via apparent cheapness never get these kinds of professionals.

BY THE WAY... as per regulations, any time rates and/or fees are discussed, or change significantly, the broker should be sending you an updated GFE within 72 hours of the conversation. Therefore (should your broker 'forget' the regulations,) call and chat, and if anything's changed or rates have shifted, ask for a fresh GFE to document the changes.

Also, when do you decide whether to lock in a rate? I'm planning on sending in my application this week and wondering whether to lock the rate or not.

This is totally a judgment call, and there is no right or wrong answer in foresight (only hindsight.)

I *WOULD* offer that, in the current rate environment, I would go ahead and let the rate float unlocked until you get within 7-12 days of signing. Rates are currently stable at worst, and slowly shrinking at best... so get as much of your loan complete as possible before locking.

[CAVEAT: All that could change in a hearbeat if we declare war, or someone else does, or anything else stupid happens.)

Good luck!
Dave Donhoff
Foolish Mortgage Broker
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