No. of Recommendations: 1
Hi flobaby,

How accurate are they?


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
Print the post  


Useful Resources
Our Home Center has all you need to make buying and owning a home a great experience. Get or refinance a mortgage and much more!
Buying/Selling a Home FAQ

Mortgage Professor
Offsite resource for mortgage questions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.