Saline Real Estate and Homes for Sale

When you're looking to buy a Saline home or condo, and you meet with a local lender, be sure you get a GFE.

What's that, you say?  Get goofy?

Not quite.

When you choose a mortgage lender to help you finance your Saline home or condo, your lender is required by the Federal Real Estate Settlement Procedures Act (RESPA) to provide you with an estimate of the fees due at closing (closing fees, or costs).  This document, called the good-faith estimate, or GFE, is supposed to be provided to you within three days of applying for a loan.  The lender has satisfied the requirement if the good-faith estimate is mailed within three days, but really, you should get the GFE when you meet with a lender.

The closing fees, also called settlement costs or closing costs, cover almost every expense associated with your home loan.  Because closing costs typically amount to between 3 percent and 5 percent of the purchase price, it is best to wait until you receive the good-faith estimate before committing to a loan.  Smart shoppers obtain good-faith estimates from two or more lenders, compare their costs, and ask questions about any large discrepancies.

The purpose of the GFE is to provide you with the information you need to shop for a loan effectively.   Unfortunately, it doesn't completely serve this purpose, either with or without another disclosure called the Truth in Lending Disclosure Statement (TIL).

Why?  Well, the GFE shows the mortgage interest rate.  The TIL shows the annual percentage rate (APR), which is the mortgage interest rate adjusted for points and some lender fees (the closing costs).  Keep in mind, however, that the mortgage rate and the APR are as of the day the documents were generated, and since the market is volatile (haven't we seen THAT lately?), they might not apply one day later.

You can depend on quoted rates and points only when you have written confirmation from your lender that the terms have been "locked".

Remember that the good-faith estimate is just that -- an estimate.  The lender directly controls some of the fees, and those are the ones to pay the most attention to when you are comparing mortgage loan offers.  Some fees are performed by third parties (such as an Appraiser), and usually don't vary much from lender to lender.  Other expenses are under your control, and there are property taxes and government fees that should be the same, regardless of the lender.

Shortly before closing, you will receive a preliminary HUD1, which is a closing document similar to the GFE, except that the fees are closer to being final.  (You have a legal right to see a preliminary HUD1 the day before closing, but it may not be complete or accurate - for the reasons noted above).  Settlement costs are not known with certainty until the actual closing, when you receive your final HUD1.

You can see a  sample GFE form provided by the U.S. Department of Housing and Urban Development (HUD) here.

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If you have questions about your specific mortgage situation, you owe it to yourself to take advantage of my experience in the Saline market.  I'd be happy to meet with you!  Just give me a call at (734) 476-2063, or send an e-mail, "Vance (at) SalineMichiganRealEstate (dot) com".

You can search for homes and condos in Saline here.

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