What information does a Good Faith Estimate (GFE) provide to borrowers?

A Good Faith Estimate (GFE) is a document that provides borrowers with an estimate of the costs associated with their mortgage loan. This estimate includes various fees, such as those for processing, underwriting, and other closing costs that may come into play during the mortgage process. The GFE is designed to help borrowers understand the financial implications of their loan options, aiding them in making informed decisions.

While the GFE may mention the interest rate, it is not a final approval of the loan and does not guarantee the terms of the loan, nor does it specify a definite payment schedule. Additionally, while it may indirectly indicate the required down payment by including it in the overall cost structure, the primary focus is on detailing all expected costs and fees associated with obtaining the loan. Thus, the GFE serves as a crucial financial tool for borrowers, helping them anticipate the total expenses they may incur.