Indianapolis Area Real Estate Blog

Previewing The New Good Faith Estimate


The new Good Faith Estimate makes its debut January 1, 2010. The new format will make it easier for Indianapolis home buyers to compare loans.

Expanded from 1page to 3, the legislators responsible for the new Good Faith Estimate want it to be simpler for homeowners and home buyers to understand than the former version. By most accounts, Congress will meet this goal.

The new Good Faith Estimate includes plain-English explanations of every fee, charge, and interest payment involved in a purchase or refinance.  It also includes a section called 'The Shopping Cart' in which applicants can compare lenders. The new Good Faith Estimate is concise, too.  Using a series of 'Yes/No' checkboxes on Page 1, mortgage lenders specifically note:

  • The interest rate on the mortgage
  • Whether the interest rate can change over time
  • Whether the loan carries a prepayment penalty
  • The length of the rate lock

Currently, this information is spread across 3 separate forms. Furthermore, the new Good Faith Estimate simplifies rate-and-fee comparisons, showing applicants how a lower rate can be available for a higher set of fees, and vice versa.

For all of its clarity, though, the new Good Faith Estimate still fails to address the issue of 'suitability'.  As in, is this the right loan for the right borrower? 

That's something only a loan officer can do. For suitable advice, talk with a loan officer who both listens to your needs and helps you plan for them.  Great terms on an unsuitable loan are often worse than 'good' terms on the right one.

If you need a recommendation for a great loan officer, let me know.


#1 By Charlotte Real Estate at 12/7/2009 7:15 AM

Hi Paula,

It does change things... though my lenders are stressed, I think this is a net benefit to home buyers. One thing we'll have to deal with is the end of pre-approvals. One of lenders told me yesterday they won't be able to offer the pre-approval anymore because they can't do the Good Faith without a contract. So, there will be pre-quals, but no pre-approvals with offers.
Its good to re-connect. Hope you are doing well.

#2 By Mark Jernstedt at 12/7/2009 1:05 PM

The new forms will also allow the borrowers to shop for some of the closing costs on page 2 and compare other mortgage quotes on page 3 of the good faith estimate. Borrowers should still pay close attention to the new forms,they are some what complicated and also lump fees together that in the past were itemized. One good site that already has the new forms is they also let you shop for closing costs

#3 By Marcia Carlson at 12/10/2009 1:31 PM

Thanks for showing all the detailed information in such a lovely blog as i was searching on the net and got connected with this blog. I appreciate your hard work you have put in for compiling such an amazing & informative blog!!! :) i will be monitoring all your updates from time to time. Maze of information, clustered in one place, Great!
calgary Mls Listings

#4 By Apartment Rentals Hayward at 12/13/2009 10:44 PM

I think this is a great way to display information to those that may not easily understand loan agreements. Having easily worded information and a nice comparison sheet will be very helpful.

#5 By Ashlee at 12/30/2009 8:38 PM

It looks like it will def. make it easier for the buyers to read. Just kinda stinks that lenders will not be able to do pre-quals any more though. Prequals are worth a million bucks now days!

Post a Comment

Blog Archives

Posts By Category

All Categories Buyer Resources (59) Community News (37) Home and Family (36) Home Maintenance Tips (14) Homeowners (34) Homes for Sale | Listings (25) Indianapolis Things to Do (62) Indy Photo Spot (5) Lifestyle Communities (4) Local Indy (42) Market Statistics (87) Mortgage News and Info (49) Parks and Recreation (12) Random Thoughts (19) Real Estate News (73) Real Estate Terms (15) Relocation Tips (8) Seller Information (41) Upcoming Events (3)

Posts By Month

Blog Roll

Homes in Hendricks County
Grab Our RSS Feed
New Listing Alerts

Be one of the first to know when new listings matching your criteria hit the market.

Get New Listings
Relocation Guide

Find your next home and learn about neighborhoods, current market statistics, and local schools.

Free Relocation Guide
Free Market Analysis

Our free service provides you with a detailed estimate of your home's current market value.

Get a Free Market Analysis