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Is comparing Good Faith Estimates between 2 lenders the best possible way to compare 2 loans? if so, what should I be looking for?

We are trying to buy a new home in Overland, KS. by BenSonetelli from Overland, Kansas. Mar 9th 2010 Reply


Leo Harvey (LHARVEY)
#6 ranked lender in Pennsylvania - 144 contributions

The new Good Faith Estimates that were put in place by RESPA this year make it easier to compare different offers. Compare the total closing costs and the rate. Generally lower rates will have higher closing costs so make sure you are doing an apples to apples comparison. Also look at the APR which is the cost of credit with all the closing costs worked in. The lower APR will be the less costly option assuming the loan programs and rates are identical. The terms disclosed on the GFE cannot vary at closing.

Mar 10th 2010
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Rick Woodruff (rickw@emetropolitan.com)
#6 ranked lender in Kansas - 4 contributions

It depends on if the rates are locked or not, is this a Purchase or Refinance transaction. Can you send me the Good Faith Estiamtes and I can compare your better offer. rickw@emetropolitan.com

Mar 9th 2010
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Debbi Lachowsky (debbi.lachowsky)
#4 ranked lender in Arkansas - 13 contributions

The Good Faith Estimate would be the best way to compare a loan between 2 lenders, so long as both lenders are using the same loan scenerio. For instance, if you are looking for a 30 year fixed rate FHA loan, then make sure both lenders have quoted their good faith estimates using the same loan program, the same sales price, and the same loan amount. You want to be sure your comparing apples to apples and not apples to oranges. So, basically what you'll be looking at is the cost of the lenders fees and what interest rate they are willing to offer to you. The terms the lender discloses to you on the GFE cannot vary at closing, however, be sure to look at the "Important Dates" section of the GFE to see how long these estimates are available for. I hope you find this information useful and good luck in your new home purchase!

Mar 10th 2010
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J Martin (jmarr91)
#10 ranked lender in Georgia - 25 contributions

Check the APR....most importantly. Question any fees that you do not understand.

Mar 10th 2010
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