What does a good faith estimate disclose?

A good faith estimate is a crucial document in the mortgage process that discloses key loan terms and closing costs to the borrower. This estimate provides borrowers with a detailed breakdown of the anticipated expenses involved in obtaining a loan for purchasing real estate. It typically includes information such as the loan amount, interest rate, monthly payments, and the amount of various closing costs like appraisal fees, attorney fees, and other associated charges.

By presenting this information upfront, a good faith estimate allows borrowers to make informed decisions and comparisons between different lenders and loan products. It is designed to create transparency and help borrowers understand the financial obligations they will assume if they proceed with the loan.

While other choices may relate to aspects of real estate transactions, they do not pertain to the purpose of a good faith estimate. For instance, monthly rental rates and lease terms are relevant in lease agreements but outside the scope of mortgage financing. Property tax assessments and insurance rates are informative for property buyers but do not represent the loan terms or associated closing costs. Available financing options and interest rates are valuable for shoppers but are not specifically detailed in a good faith estimate, which focuses on the costs rather than broader financing choices.