good faith estimate
Definition
Approximate dollar amounts (or a range of amounts) of all the charges, costs, and fees a prospective home owner will have to pay at signing off (closing) the mortgage loan agreement on a particular property. These expenses include sales commissions or brokerages, appraisal fees, inspection fees, loan origination fees, and title search fees. Under the federal Real Estate Settlement Procedures Act (RESPA), the mortgage lenders are required to give this document to the borrower within three days of the loan application (assuming the application is approved). If a mortgage broker is involved, this estimate is provided through the broker, but the lender remains obligated for ensuring its delivery to the borrower. As its name indicates, it is an estimate only and the lender incurs no legal penalties for inaccuracies or the difference between its total and the actual total amount.
Use good faith estimate in a sentence
“ Your good faith estimate should be within your budget and enable you to proceed comfortably with an affordable plan to move into your own home. ”
“ We had made a good faith estimate and thought that it would help us a lot down the road with our business. ”
“ You need to try and come up with a good faith estimate of how much product you can put out in a given time. ”
