Good Faith Estimate – Reason To Use
When buying a home or investing in real estate getting the right kind of mortgage is important. Comparing mortgages can be a complicated thing if you don't know the amount of all the cost involved. This is why you will want to use a good faith estimate to compare mortgages. A good faith estimate is when the bank or company that you are trying to get a mortgage from tells you how much they think the closing cost will be. Banks are obligated to give you a good faith estimate within three business days of accepting your loan application. One reason you will want to use a good faith estimate is it will let you know if you can really afford the mortgage. The interest rates can be low but if you can't afford the closing cost there is a good chance that this mortgage is not for you. The last thing you want is to find the right property and think you have the right mortgage for it and it is not the case.
Another reason you will want to use a good faith estimate is it will give you some idea on the total cost of a property. If you are investing in real estate, it is important to have some idea how much a property will cost in all. The reason for this is if you invest too much money to buy a property, this property can make you lose money in a monthly basis. Some good faith estimates are different from the real closing cost. It is good to use it to give you a rough idea of the closing cost.
One last reason you will want to use a good faith estimate is it will let you know how much you are really willing to spend. If you find the right house and it is a bit out of you range because of the closing cost, you can negotiate with the seller to bring down the price a bit. If you do get the seller to lower the price a bit and you have some idea what the closing cost is, this will give you a better chance that you will not get any last minute surprises. Getting a good faith estimate not only can save you time it can also save you a lot of stress.